Tribunal grants reduced penalty option to appellant, partner's penalty reduced further.

The Tribunal extended the option of a reduced penalty of 25% to the appellant since the adjudicating authority did not provide this option in writing initially. The appellant was required to pay the duty, interest, and 25% penalty within a month to retain the reduction. Additionally, the penalty on the partner of the appellant's partnership firm was reduced from Rs. 10 lacs to Rs. 2 lacs due to the partner's payment of dues and interest. The appeals were partly allowed, and the application was disposed of accordingly.

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Issues:
Whether the option of reduced penalty of 25% under the First proviso to Section 11AC can be extended to the appellant when the adjudicating authority did not provide the option in writing in the adjudication order.

Analysis:
The main issue in this case revolves around the extension of the reduced penalty option of 25% to the appellant when the adjudicating authority failed to provide this option in writing in the adjudication order. The appellant's counsel argued that since the option was not given in the original order, it can be extended at the appellate stage, citing various judgments to support this claim. Additionally, reference was made to Board Circular No. 208/07/2008-CX-6, which mandates that the adjudicating authority must offer the reduced penalty option in writing. The counsel contended that based on the cited decisions and the circular, the appellant should be given the option of the reduced penalty of 25%. Furthermore, regarding the appeal of the partner of the appellant's partnership firm, it was argued that since the penalty was imposed on the firm, a separate penalty on the partner should not be imposed.

On the contrary, the Revenue representative reiterated the findings of the impugned order, stating that the issue of the 25% penalty option was not raised by the appellant before the Commissioner (Appeal), hence it cannot be raised at this stage. The representative also highlighted that the appellant had not paid the duty, interest, and 25% penalty even after the Commissioner's order, which, according to them, disqualifies the appellant from receiving the option. The representative further argued that the partner should be held personally liable for the penalty, as the partner is distinct from the partnership firm, and the firm's failure to pay government dues makes the partners directly responsible, citing relevant judgments to support this stance.

Upon careful consideration, the Tribunal delved into the narrow compass of whether the option of the reduced penalty of 25% could be extended. Citing the Supreme Court's decision in the case of R.A. Shaikh Paper Mill Pvt Ltd, the Tribunal held that the option should be provided in writing by the adjudicating authority, in line with Board Circular No. 208/07/2008-CX-6. Consequently, since the adjudicating authority did not grant the option in the present case, the Tribunal extended the option at this stage, subject to the condition that the appellant pays the duty, interest, and 25% penalty within a month. Failure to comply would result in the appellant losing the reduction. Regarding the penalty on the partner, the Tribunal acknowledged the partner's responsibility for the firm's dues, but considering the partner's payment of the dues and interest, the penalty on the partner was reduced from Rs. 10 lacs to Rs. 2 lacs. As a result, the appeals were partly allowed, and the application was disposed of accordingly.

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