Commissioner lacks power to lessen penalty under Central Excise Act; Tribunal reinstates original penalty amount.

The Tribunal held that the Commissioner (Appeals) did not have the authority to reduce the penalty under Section 11AC of the Central Excise Act, which should be equal to the duty involved in the case. Relying on a Supreme Court decision, the Tribunal reinstated the penalty amount to its original sum of Rs. 81,012, allowing the appeal filed by the Revenue.

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Issues:
- Reduction of penalty under Section 11AC of the Central Excise Act by Commissioner (Appeals)

Analysis:
The appeal was filed by the Revenue against an order-in-appeal, wherein the Commissioner (Appeals) upheld the order-in-original but reduced the penalty imposed under Section 11AC of the Central Excise Act from Rs. 81,012 to Rs. 10,000. The Revenue contended that the penalty under Section 11AC is mandatory and should be equal to the duty involved in the case. The authorized representative for the Revenue argued that the Commissioner (Appeals) does not have the authority to reduce the penalty imposed under Section 11AC, citing a Supreme Court decision in the case of Union of India Vs. Rajasthan Spinning & Weaving Mills. Despite multiple notices, no one appeared for the respondent during the proceedings.

Upon review, the Tribunal found that the key issue in the appeal was whether the Commissioner (Appeals) had the power to reduce the penalty imposed under Section 11AC of the Central Excise Act. Referring to the Supreme Court judgment in Union of India Vs. Rajasthan Spinning & Weaving Mills, the Tribunal confirmed that the penalty under Section 11AC is mandatory and should be equal to the Central Excise duty involved in the case. Consequently, the Tribunal concluded that the Commissioner (Appeals) does not possess the authority to reduce the penalty under Section 11AC. As a result, the appeal filed by the Revenue was allowed, and the penalty amount was reinstated to its original sum of Rs. 81,012.

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