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of <h1>High Court affirms reduced penalty under Section 11AC for timely deposit</h1> <h3>COMMISSIONER OF C. EX., CUS. & SERVICE TAX Versus CAPRIHANS (I) LTD.</h3> COMMISSIONER OF C. EX., CUS. & SERVICE TAX Versus CAPRIHANS (I) LTD. - 2014 (299) E.L.T. 334 (Guj.) Issues:Interpretation of proviso of Section 11AC of the Central Excise Act, 1944 by the CESTAT in offering an assessee to deposit amount of interest and penalty within 30 days to avail reduced penalty at 25% of duty.Analysis:1. The Revenue raised a question on whether the CESTAT erred in interpreting the proviso of Section 11AC of the Central Excise Act by allowing an assessee to deposit interest and penalty within 30 days of its order to benefit from a reduced penalty without redetermining the duty amount.2. Upon review of documents and material, it was found that the respondent, engaged in the manufacture of PVC film, contravened the Central Excise Act, 1944.3. A show cause notice was issued demanding central excise duty with interest for goods cleared from June 1999 to March 2000, along with proposing a penalty under Section 11AC of the Act.4. The adjudicating authorities confirmed the duty demand with interest and penalty. The Tribunal allowed the option to pay duty, interest, and penalty within 30 days, reducing the penalty to 25% based on its decision in a previous case.5. The Tribunal's decision was in line with the High Court's view in previous cases, confirming that an option to pay duty, interest, and penalty within 30 days, with the penalty reduced to 25%, should be provided if there is no error in the Tribunal's order.6. The High Court dismissed the appeal, stating that no legal question arose for determination as there was no error found in the Tribunal's decision, thereby upholding the Tribunal's interpretation of the proviso of Section 11AC of the Central Excise Act.This comprehensive analysis covers the interpretation of the legal provisions, the factual background, the Tribunal's decision, and the High Court's final judgment, providing a detailed understanding of the issues involved in the case.
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