Tribunal upholds penalty match to duty under Section 11AC, dismisses appeal against enhanced penalty.

The appellate tribunal upheld the Commissioner (Appeals) decision to enhance the penalty to match the duty confirmed under Section 11AC of the Act. The tribunal ruled that the penalty must be equal to the duty amount, as mandated by law, rejecting the appellant's arguments against the penalty imposition. Consequently, the appellant's appeal was dismissed, affirming the imposition of the enhanced penalty in line with the duty liability.

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Issues:
1. Imposition of penalty under Section 11AC of the Act.
2. Allegations of clandestine removal not raised in show cause notice.
3. Challenge to penalty imposition and duty liability.
4. Appellate authority's decision on the quantum of penalty.

Analysis:
The case involved the imposition of a penalty under Section 11AC of the Act on an appellant engaged in the manufacture of pharmaceutical products. The appellant had paid the duty amount but contested the reduced penalty imposed by the adjudicating authority. The Revenue filed an appeal challenging the penalty, leading to the Commissioner (Appeals) enhancing the penalty to match the duty confirmed in the original order.

Regarding the allegation of clandestine removal, the appellant's counsel argued that it was not raised in the show cause notice, questioning the basis of the Commissioner's decision. The appellant contended that there was no suppression of facts and the demand was time-barred. Despite not disputing the duty liability, the penalty was imposed, which the appellant believed should not have been the case.

On the other hand, the Revenue's representative reiterated the findings of the impugned order, supporting the imposition of the enhanced penalty. The appellate tribunal carefully considered both sides' submissions and the records. It noted that the appellant did not challenge the demand confirmation or the penalty imposition by filing an appeal before the Commissioner (Appeals). Citing the Supreme Court judgment in Union of India Vs. Dharmendra Textile Processors, the tribunal ruled that the penalty under Section 11AC must be equal to the duty confirmed, as it was mandatory and could not be reduced.

In conclusion, the tribunal upheld the Commissioner (Appeals) decision to enhance the penalty to match the duty confirmed, stating that the penalty under Section 11AC had to be equal to the duty amount. As a result, the appellant's appeal was dismissed, and the impugned order was upheld.

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