TaxTMI 
TaxTMI 
2011 (9) TMI 541
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....44 can be reduced even in cases where evasion of duty is established. (ii) If answer to Question No. (i) is in the affirmative whether the authority reducing the amount of penalty is duty bound to record reasons for such reduction. 2. Briefly, the facts obtaining in the case are as follows: On 22.01.2001 the revenue received intelligence that the respondent was engaged in manufacture and clearance of "Raj Ratan Qiwam" falling under chapter heading No. 2404.40 of the schedule to the Central Excise Tarrif Act, 1985 without requisite registration. Consequently, on visiting the factory of the respondent, such, clandestinely manufactured goods were found, and consequently seized. 3. A notice dated 23.03.2001 was issued calling upon ....
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.... law ought to be answered in favour of the revenue in view of the decision of this court taken in the Commissioner of Central Excise vs Kandhari Radio Corporation passed in CEAC No. 6/2007 on 26.09.2011. Mr Satish Kumar submitted that in view of the fact that the Tribunal had confirmed the demand of duty under the provisions of Section 11AC of the Central Excise Act, 1944 there was no discretion available, in directing, as had been done by the Tribunal that, penalty be not levied. 7. On the other hand Mr Bashist appearing on behalf of the respondent submitted that since the respondent had accepted the imposition of duty and voluntarily deposited the duty demanded, no penalty ought to be levied as there was no intention to clear the goods....
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....gra. The Supreme Court in the case of UOI vs Rajasthan Spinning & Weaving Mills (2009) 13 SCC 448 has held that payment of duty whether made, before or after the issuance of show cause notice is not an aspect which ought to be factored in by an authority seeking to impose penalty under Section 11AC. The court has also gone on to explain its own judgment in the case of UOI vs Dharmendra Textile Processors 2008 (231) E.L.T. 3(SC) by holding that once it is noticed that the conditions provided in Section 11AC are fulfilled, no discretion is left in the authority concerned to reduce the duty to an amount less than the duty determined. The relevant observations on the aforesaid aspects are extracted hereinbelow:- ".....5. In our view the reas....
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.... in Dharmendra Textile is only insofar as Section 11AC is concerned. We make no observations (as a matter of fact there is no occasion for it) with regard to the several other statutory provisions that came up for consideration in that decision..." (emphasis is ours) 10. The present case is one of evasion of duty. There were no arguments advanced before the Tribunal that the conditions prescribed under Section 11AC were not fulfilled. We had taken a similar view in the case of Kandhari Radio Corporation (supra) based on judgment of Supreme court in the case of Dharmendra Textile (supra) and Sony India Ltd. vs Commissioner of Central Excise, Delhi 2004(167) E.L.T. 385 (SC). The judgment of the Supreme Court in Rajasthan Spinning Mills (su....