Dismissed appeal as 25% penalty reduction not allowed on appeal; must be in original order.

The appeal was dismissed as the benefit of a 25% reduction in penalty under Section 11AC could not be granted at the appellate stage, following the precedent set by the Jurisdictional High Court of Bombay. The Member (Judicial) upheld the impugned order, emphasizing that the option for reduction must be provided in the adjudication order itself and cannot be extended to the appellant at a later stage.

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Issues involved:
Whether reduction of penalty to 25% under Section 11AC can be allowed after passing the adjudication order at the appellate stage.

Analysis:
The appeal was directed against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals) Mumbai-II, upholding the Order-in-Original and rejecting the appellant's appeal. The main issue in question was whether the option of reducing the penalty to 25% under Section 11AC of the Act could be granted after the adjudication order at the appellate stage.

The appellant's counsel argued that the adjudicating authority did not provide the option as required by Section 11AC, and hence, the option could be extended to the appellant at a later stage. On the other hand, the Revenue's representative relied on a judgment of the Hon'ble Bombay High Court in the case of Commissioner of Central Excise vs. Castrol India Ltd. to support their position.

After considering the arguments from both sides, the Member (Judicial) referred to the judgment of the Jurisdictional High Court of Bombay in the case of Castrol India Ltd., which established that the benefit of 25% reduction under Section 11AC cannot be granted at the appeal stage, regardless of whether the option was explicitly provided in the adjudication order or not. Based on this precedent, the Member upheld the impugned order, stating that it did not have any flaws, and subsequently dismissed the appeal.

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