Reduced penalty under Central Excise law cannot be claimed later when the issue was never raised in appeal.

A post-disposal request for reduced penalty under the proviso to Section 11AC of the Central Excise Act, 1944 was declined because the assessee had not raised that claim before the adjudicating authority, appellate authority, Tribunal, or in the tax appeal. The earlier appeal had been decided only on limitation, no substantial question of law on the reduced-penalty issue had been framed, and the restricted scope of Section 35G did not permit granting fresh relief in an application. The claim was also treated as debatable rather than a clerical correction or accidental omission, so the benefit of paying 25% of the penalty was not available in this application.

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Issues: Whether the assessee, by way of a post-disposal application, was entitled to be granted the benefit of paying 25% of the penalty under the proviso to Section 11AC of the Central Excise Act, 1944, when that relief had not been claimed before the lower authorities or considered in the tax appeal.

Analysis: Section 11AC of the Central Excise Act, 1944 permits payment of reduced penalty where the duty and interest are paid within the stipulated period, but the record showed that the assessee had not raised this grievance before the adjudicating authority, the appellate authority, the Tribunal, or in the tax appeal. The earlier appeal had been decided only on the issue of limitation, and no substantial question of law had been formulated on the reduced-penalty issue. In view of the restricted scope of Section 35G of the Central Excise Act, 1944, and the fact that the claim was not part of the issues decided in appeal, the requested relief could not be granted in the present application. The matter was also treated as debatable and not one of clerical correction or accidental omission.

Conclusion: The assessee was not entitled to the benefit of the proviso to Section 11AC of the Central Excise Act, 1944 in this application.

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