2009 (11) TMI 252

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....Whether the penalty amount mentioned in Section 11AC of the Central Excise Act, 1944, is the discretion of the Quasi Judicial Authority viz., the Tribunal." 3. The issue arises in the following circumstances: (a) The first respondent/assessee had taken 50% of the duty paid on the capital goods as Modvat Credit in 1999-2000 and taken Cenvat Credit to the value of Rs. 1,42,559/- vide RG23C Sl. No. 25 on 24-12-1998 for capital goods along with spares, received under invoice No. 1485 dated 7-12-1998 from M/s. Cadmach Machinery Company Limited, Ahmedabad. (b) Subsequently, under their own private invoice MC001 dated 9-9-2000 the said machineries were removed by the first respondent from chennai to Mumbai for a value of Rs. 7,08,366/- without ....

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....nder Section 11AB of the Act. (f) However, on further appeal preferred by the assessee as well as by the Department, the Tribunal, even after finding the first respondent/assessee guilty of wrong availing of the Cenvat credit and also holding its failure to reverse the credit immediately after the same was pointed out to it by the audit party of the department, ultimately reduced the penalty to Rs. 50,000/-, while upholding the levy of interest under Section 11AB of the Act. (g) it is as against the above order of the Tribunal, the Department has come forward with this appeal. The first respondent/assessee has however not chosen to challenge the said order. 4. We heard Mr. K. Ravichandra Babu, learned Senior Central Government Standing C....

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....as not correctly decided but SEBI case has analysed the legal position in the correct perspectives. The reference is answered. The matter shall now be placed before the Division Bench to deal with the matter in the light of what has been stated above, only so far as the cases where challenge to vires of Rule 96ZQ(5) are concerned. In all other cases the orders of the High Court or the Tribunal, as the case may be, are quashed and the matter remitted to it for disposal in the light of present judgments. Appeals except Civil Appeals Nos. 3397 & 3398-99 of 2003, 4096 of 2004, 3388 & 5277 of 2006, 4316, 4317, 675 and 1420 of 2007 and appeal relating to SLP (C) No. 21751 of 2007 are allowed and the excepted appeals shall now be placed before the....

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....ined under Section 11A(2) of the Act. 6. With the above legal position in mind when we examine the case on hand, a perusal of the Appellate Tribunal's order discloses that there was every justification for invoking Section 11AC on the first respondent/assessee. The findings of the Tribunal have been recorded in Paragraph 4 of the order, which reads as under: "It appears from the facts of the case that the assessee has been working under self-removal procedure. Admittedly, they took 50% of the credit in 1999-2000 and the balance 50% in 2000-01, which indicates that they were aware of the relevant Modvat rules. Again, it is an admitted fact that, in March, 2002, their mistake of having removed the capital goods without payment of duty/rever....