Appeal Dismissed: Upheld Penalty Reduction for Timely Payment

The judgment dismissed the Department's appeal, upholding the reduction of penalty based on the respondent's timely payment of 25% of the penalty within 30 days as required by Section 11AC of the Central Excise Act. The appellate authority failed to consider this evidence, leading to the appeal dismissal and emphasizing compliance with penalty payment provisions.

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Issues:
1. Double availing of CENVAT credit on the same invoice.
2. Imposition of penalty under Rule 15(2) of the CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act.
3. Reduction of penalty by the first appellate authority.
4. Appeal against the reduction of penalty by the Department.

Analysis:
1. The respondent had mistakenly taken CENVAT credit twice on the same invoice, which was discovered during an audit by the Department. A show-cause notice was issued seeking recovery of the irregularly availed credit and imposition of penalty. The respondent claimed to have reversed the credit with interest before the notice was issued, arguing against the penalty imposition due to a clerical mistake. The original authority imposed a penalty equal to the credit amount, which was later reduced by the first appellate authority. The Department appealed to restore the penalty to the original level.

2. The main issue debated was whether any penalty was warranted on the respondent. It was revealed during the hearing that the respondent had paid 25% of the penalty under protest within 30 days of receiving the Order-in-Original. The Commissioner (Appeals) did not dispute this payment but still altered the penalty amount. As per Section 11AC of the Central Excise Act, if 25% of the penalty is paid within 30 days, no further penalty is required. The respondent provided evidence of payment within the stipulated time, which was overlooked by the appellate authority.

3. The respondent submitted a letter and counterfoil indicating the payment of 25% of the duty as penalty within the specified timeframe. Despite this evidence, the Commissioner (Appeals) failed to consider the provisions of Section 11AC while dealing with the penalty issue. As there was no valid challenge to the respondent's claim of timely payment, the appeal of the Department was dismissed, upholding the reduction of penalty by the appellate authority.

In conclusion, the judgment dismissed the Department's appeal, emphasizing the importance of complying with penalty payment provisions outlined in the Central Excise Act and upholding the reduction of penalty based on the timely payment made by the respondent.

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