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 ...
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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 11AC of the Central Excise Act, 1944. The tribunal agreed with the appellant's argument that the penalty option was not provided as mandated by the statute, referencing a judgment of the Gujarat High Court. Consequently, the tribunal modified the Commissioner(Appeals)' order, remanding the matter for further proceedings in accordance with the directive.
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.
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