2010 (12) TMI 588

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....ted by Finance Act, 1996 with intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum"? 2. Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in allowing appeal of the revenue only to the extent of enhancement of penalty to the extent of 25% of the duty amount along with confirmation of interest and thereby disallowing appeal of the revenue for rest of the claim made in the impugned appeal before the Tribunal?" 2. The facts stated in brief are that against the order made by the adjudicating authority confirming dem....

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.... the part of the assessee but was a result of the search and seizure action carried out and seizure effected by the department. It was also contended that in the present case penalty has been imposed under rule 25 of the Rules and as such the provisions of Section 11AC of the Act could not have been invoked for the purpose of reducing the penalty. 4. As can be seen from the impugned order of the Tribunal, the Tribunal, keeping in view the fact that the entire duty amount was deposited prior to issuance of the show cause notice held that proviso to Section 11AC of the Act would be attracted and accordingly imposed penalty to the extent of 25% of the duty amount and confirmed the interest. 5. Thus, whereas the Commissioner (Ap....

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....e liable to Confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or [rupees two thousand], whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice." 6. On a plain reading of Rule 25 of the Rules it is apparent that under the said rule penalty not exceeding the duty on the excisable goods in respect of which the contravention of the nature specified ther....