TaxTMI 
TaxTMI 
TaxTMI 
2009 (7) TMI 1136
X X X X Extracts X X X X
X X X X Extracts X X X X
....Rules, 2001, read with Section 11AC. On appeal against the above order, Commissioner (Appeals) upheld duty and interest confirmation. He also upheld penalty of 100% duty amount in terms of Section 11AC but gave an option to the assessee to pay reduced penalty along with interest within a period of 30 days of the receipt of his order, subject to which the balance amount of penalty would be set aside. On the other hand, it is the Revenue's contention that the provisions of Section 11AC having been upheld against the respondents, the benefit of first proviso to Section 11AC is applicable only when the entire duty, interest and 25% of penalty is paid within a period of 30 days of the order passed by the Central Excise officers, in terms of sub-section (2) of Section 11A. Such deposit having not been made by the assessee within a period of 30 days from the order passed by Assistant Commissioner, the extension of such period to deposit the reduced penalty amount, by the Commissioner (Appeals) was not in accordance with the said proviso. The reasoning adopted by the Commissioner (Appeals) that harmonious construction of Section 11AC and Section 35F would lead to a situation where an appea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The question arises as to at which point of time, such determination can be said to have taken place i.e. from the order of the Original Adjudicating Authority or the order of Appellate Authority. The answer to this question also lies in the proviso itself, when it refers to duty determination under sub-section (2) of Section 11A. Sub-section (2) of Section 11A refers to duty determination by the Central Excise Officer against a person on whom notice is served under sub-section-I. As such, it becomes clear that the order referred in the proviso to Section 11AC, is the first order of determination of amount of duty due from a person to whom notice has been issued. To avail the benefit of the said proviso to Section 11AC, the duty so determined by the first officer along with interest and 25% of the penalty is required to be paid within a period of 30 days. The second proviso to Section makes it very clear that the benefit of reduced penalty under the first proviso shall be available only if the penalty so determined has also been paid within a period of 30 days, referred to in that proviso. Admittedly the penalty and interest in the present case was not deposited within a period of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by the higher appellate forum, the period of 30 days would start from the date of communication of that order in respect of such increased penalty. This indicates that the period of 30 days mentioned in the first proviso is relatable to adjudication order passed by first authority. As such, the order of Commissioner (Appeals) granting benefit of first proviso to the respondents by giving them option to deposit 25% of penalty within a period of 30 days from the date of communication of his order, is not in strict consonance with the provisions of Section 11AC read with the provisos. 7. I also find that appellate authority reference to Section 35F is not called for as both the Sections operate in different fields. Section 35F deals with the pre-deposit of duty and penalties levied, whereas Section 11AC reduces the penalty automatically to 25% in terms of first proviso, if deposited within a period of 30 days. If an assessee chooses to file an appeal against the order of adjudication without first depositing the dues, he runs the risk of paying entire penalty and interest in case of loosing his appeal before the higher appellate forum. Such proviso to Section 11AC gives relief to th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....[2009 (238) E.L.T. 209 (P&H)], after taking note of Dharamendra Textiles decision of the Hon'ble Supreme Court, has observed as under in Para 12 & 14 of their judgment :- "12. The order in original also imposes penalty of Rs. 5,10,955/- which is equal to the amount of duty of excise assessed by the Adjudicating Authority. It is thus evident that acting on 2nd proviso the amount of penalty to the extent of 25% could not have been deposited and order was passed by the Adjudicating Authority in derogation of the express provision made by the 2nd proviso and there was no opportunity for the dealer-respondent to deposit 25% of the amount. Accordingly he challenged the order in appeal where again the demand of penalty equivalent to duty of excise was maintained (although some relief was given regarding personal penalty imposed on Shri Satish Kumar, Managing Director). It was thereafter that an appeal was filed and the Tribunal reduced the penalty to 25% of the total amount of duty of excise as assessed by the concerned officer. The Tribunal had primarily placed reliance on a judgment of the Delhi High Court in the case of Malbro Appliances (Private) Limited, (supra). 14. The view taken....