2015 (4) TMI 457 - AT - Central Excise

Appellate tribunal directs payment of 25% penalty amount under Central Excise Act

The appellate tribunal allowed the appeal, directing the adjudicating authority to permit the appellant to pay 25% of the penalty amount under Section ... Eligibility to pay 25% of the total penalty amount imposed under section 11AC of Central Excise Act, 1944 - Held that:- in view of judgement of the Hon ble Gujarat High Court in the case Commr. Of Central Excise & Customs, Surat-I vs. Harish Silk Mills (2010 (2) TMI 494 - GUJARAT HIGH COURT). Therefore, while examining the issue of excess payment of duty, the adjudicating authority should also extend the option to the Appellant for payment of 25% of the penalty as prescribed under section 11AC of Central Excise Act, 1944 on fulfillment of conditions prescribed thereunder. The Ld.Commissioner(Appeals) s order to this extent is modified and the matter remanded to the adjudicating authority for deciding the case in the light of above observations - Decided in favour of assessee. Issues: Appeal against Order-in-Appeal regarding penalty under Section 11AC of Central Excise Act, 1944 without the option to pay 25% of the penalty amount.The judgment pertains to an appeal filed against Order-in-Appeal No. 217-218/KOL-III/2011 passed by the Commissioner(Appeal-I) of Central Excise, Kolkata. The appellant raised concerns about discrepancies noticed during a visit by officers, leading to the issuance of a show cause notice for confiscation and recovery of duty against goods cleared clandestinely. The Assistant Commissioner confirmed the demand, imposed penalties, and directed confiscation of goods and the vehicle. The Commissioner(Appeals) dropped proceedings against the vehicle owner but upheld the penalty against the appellant, prompting the current appeal.The appellant contended that although they questioned the confiscation of goods, they focused on challenging the penalty imposed under Section 11AC of Central Excise Act, 1944 without the option to pay 25% of the penalty amount as stipulated by the statute. The appellant argued that the Commissioner(Appeals) failed to consider their submission regarding the absence of the option to pay 25% of the penalty, citing a judgment of the Gujarat High Court for support. The Revenue supported the Commissioner(Appeals)' findings and mentioned a remand for verifying excess payment of duty.The appellate tribunal found that the main issue raised by the appellant concerned their entitlement to avail the 25% penalty payment option under Section 11AC of the Central Excise Act, 1944, which was not provided to them despite being mandated by the statute. The tribunal agreed with the appellant's argument, referencing the Gujarat High Court judgment, and directed the adjudicating authority to allow the appellant the option to pay 25% of the penalty amount upon fulfilling the conditions outlined in the statute. Consequently, the tribunal modified the Commissioner(Appeals)' order and remanded the matter to the adjudicating authority for further proceedings in line with the observations made. The appeal was disposed of accordingly.