Limitation plea must be decided before enhanced penalty under Central Excise law can be sustained

The appellate order was set aside because the limitation plea had not been adjudicated, and the enhanced penalty under Section 11AC of the Central Excise Act could not be sustained without deciding that core issue. As the controversy had not been examined on merits, the Commissioner (Appeals) was required to redecide the matter after considering limitation, and only then address the penalty question if necessary. The remand ensured that the substantive objection was determined before any final view on penalty was taken.

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Issues: Whether the matter was required to be remanded because the issue of limitation had not been adjudicated, and the enhanced penalty under Section 11AC of the Central Excise Act, 1944 could be sustained without such consideration.

Analysis: The order under challenge did not deal with the appellants' contention on limitation and was based on an earlier order passed in the Revenue's appeal confined to enhancement of penalty. Since the core controversy had not been decided on merits, further adjudication by the appellate authority was necessary before the penalty issue could be finally dealt with.

Conclusion: The matter was remanded to the Commissioner (Appeals) for fresh decision on merits after considering the limitation plea, and the penalty issue was to be decided thereafter if necessary.

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