Appellant granted 25% penalty reduction after Tribunal accepts calculation mistake claim

The Tribunal granted the appellant's request for a reduction in penalty under Section 11AC to 25%, acknowledging the payment of the corrected amount with interest and 25% penalty within the specified timeframe. The appellant's contention of a calculation mistake in the demanded amount was accepted by the Tribunal, resulting in the penalty reduction.

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Issues:
- Appeal against Order-in-Appeal dated 22.12.2010 regarding demand of Excise duty
- Calculation mistake in the demanded amount
- Reduction of penalty under Section 11AC to 25%

Analysis:
The appeal in this case was filed against the Order-in-Appeal dated 22.12.2010 concerning the demand of Excise duty on the manufacture of Clinker and Grey Portland Cement falling under Chapter 25 of the Central Excise Tariff. The appellant had availed the small scale exemption during the financial years 2006-2007 and 2007-2008. A Show Cause Notice was issued by the Revenue alleging that the appellant had crossed the exemption limit and not paid the Excise duty on the goods manufactured, resulting in a demand of 12,37,435/-. The Original Authority confirmed this demand, which was later reduced to &8377; 7,77,816/- by the Commissioner (Appeals). The appellant, however, contended that due to a calculation mistake, the correct demand should be &8377; 7,76,100/-, which they had already paid along with interest and 25% penalty. The appellant sought a reduction in the penalty amount imposed under Section 11AC to 25%.

During the hearing, the appellant's counsel confirmed that they were not challenging the demand amount of &8377; 7,77,816/- as confirmed by the Commissioner (Appeals). The appellant had already paid the corrected amount of &8377; 7,76,100/- along with interest and 25% penalty. The appellant requested that the penalty amount imposed under Section 11AC be reduced to 25%, as the option of payment of reduced penalty was not made available by the Commissioner (Appeals) in the impugned order. Section 11AC(c) provides that if the duty and interest are paid within 30 days from the date of communication of the order, the penalty payable shall be 25% of the duty determined under Section 11A. In this case, the appellant had already paid the corrected amount with interest and 25% penalty, and the minor difference was due to a calculation mistake, which was accepted by the Tribunal.

In light of the above, the Tribunal extended the benefit of reduction in penalty to 25% to the appellant, considering that the duty and interest had been paid within the stipulated time frame. The judgment was delivered in the open court, granting the appellant the relief sought regarding the penalty reduction under Section 11AC.

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