TaxTMI 
TaxTMI 
2013 (8) TMI 539
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....e of Rs.40,26,799/- with interest and impugned penalty of an equal amount under Rule 173 of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act. When challenged in appeal before the Customs Excise & Service Tax Appellate Tribunal, Ahmedabad ("the Tribunal" for short), the Tribunal vide its order dated 22.11.2006 partly allowed the appeal of the respondent. 2. Aggrieved by the same, the Department challenged the same in Tax Appeal No.1996 of 2006. This Court remanded the matter back to the Tribunal for consideration vide its order dated 2.2.2009 in the light of the decision of the Apex Court rendered in case of Union of India vs. Dharmendra Textile Processors reported in 2008(231) ELT 3. 3. The Tribunal imposed penalty of the amount equivalent to the demand of duty confirmed by the adjudicating Commissioner. However, it provided option to the respondent to pay reduced penalty if duty, interest and penalty were paid within 30 days from the receipt of the order of the Tribunal. Such order dated 24.3.2010 was challenged by way of an application for rectification of mistake by the Department. The Tribunal rejected the same on 14.12.2010. 3A. Aggrieved by ....
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....ginal. Since the assessee has not paid the amount of interest and 25% of penalty within 30 days, he cannot avail the benefit of reduced penalty from the order-in-original determining the duty under Section 11A(2). 7. On thus hearing learned counsel and on perusal of the record, it can be noted that this Court has confirmed the order of the Tribunal based on the decision of this Court rendered in the case of Commissioner of C. Ex., Ahmedabad-I vs. Akash Fashion Prints Pvt. Ltd. reported in 2009(239) E.L.T. 439(Guj.). In number of other appeals also such stand of the Tribunal had been affirmed by this Court. 8. As can be noted from the record that when this Court remanded the matter to the Tribunal for passing a fresh order in accordance with law, it had kept the question of applicability of proviso to Section 11AC open for its consideration by directing thus:- "Therefore, the order of the Tribunal is set aside. The matter is remanded to the Tribunal for passing fresh orders in accordance with law. The question of applicability of proviso to Section 11AC will also be considered and examined by the Tribunal while deciding the matter afresh. The Tribunal shall pass fresh order withi....
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.... is the maximum fixed or the quantum has to be between two limits fixed. In the cases at hand, there is no variable and, therefore, no discretion. It is pointed out that prior to insertion of Section 11AC, Rule 173Q was in vogue in which no mens rea was provided for. It only stated "which he knows or has reason to believe". The said clause referred to wilful action. According to learned counsel what was inferentially provided in some respects in Rule 173Q, now stands explicitly provided in Section 11AC. Where the outer limit of penalty is fixed and the statute provides that it should not exceed a particular limit, that itself indicates scope for discretion but that is not the case here. 6. It was pointed out that Rule 96ZO refers to manufacturer of ingots and billets while Rule 96ZQ relates to independent processor of textile fabrics. They belong to the same category and failure to pay duty attracts penal consequences. In the other category in cases of fraud etc. penalty is for statutory offence. It is pointed out that in Dilip Shroffs case (supra) the question relating to discretion was not the basic issue. In fact, Section 271(1)(c) of the I. T. Act provides for some discretion ....
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....ourt, the duty amount was paid prior to the raising of demand and the Court, therefore, held that on invoking the second proviso to Section 11AC, the order of the Tribunal, of reducing the penalty amount, was justifiable in the following words:- "4. When the matter came up for hearing today, the learned counsel for the appellant at the outset prayed for time so as to have the appeal listed along with other matters wherein issue regarding penalty under Section 11AC of the Central Excise Act, 1944 ("the Act"), is stated to be pending by way of various Tax Appeals. When the attention of the counsel was invited to the order made by the Adjudicating Authority and the fact that the Tribunal had reduced the penalty to 25% of the penalty imposed, the learned counsel once again reiterated request for adjournment. In light of the peculiar facts of the case, the request has been turned down by the Court. 5. Section 11AC of the Act provides for levy of penalty in cases of short-levy or non-levy of duty in certain cases. The first proviso thereunder provides for exception to the main provision by stipulating that where the duty and the interest are paid within thirty days from the date of com....
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....en any option was to whether he wanted to pay duty demand within 30 days from the date of adjudication of the order. It would be worthwhile to reproduce relevant paragraphs:- " 12. This very question has come up before the Delhi High Court in the case of K. P. Pouches (P) Limited V/s. Union of India, 2008 (228) ELT 31 (DELHI) wherein the Court after discussing the controversy between the parties in paragraph 27 of the judgment has observed that to obviate any similar situation from arising in future, the adjudicating authority in its adjudication order under the Act should explicitly set out the options available to the Assessee under Section 11AC of the Act. Once the chances are made known to the assessee and it still does not take advantage of the first Proviso to Section 11AC of the Act, it will be entirely at its own peril. The Court, therefore, held that it would be beneficial both from the point of view of the revenue as well as the assessee, if the options available to the assessee are mentioned in the adjudication order itself. 13. Pursuant to the above judgment of the Delhi High Court, the Central Excise department has issued Circular on 22.05.2008 wherein it is clarifie....
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....e date of the adjudication order and in that case, he has to pay only 25% of the penalty. Since this aspect was not considered by the authorities below, we are of the view that interest of justice would better be served if the matter is remanded to the adjudicating authority with a direction to frame an order denovo after giving the assessee an option to pay duty amount within 30 days by making it explicitly clear in the order itself that if the assessee wants to avail such option, he is permitted to do so. 16. In the above view of the mater, we allow the appeal filed by the assessee for statistical purpose and remand the matter to the Additional Commissioner to pass a fresh order in light of the observations made hereinabove. It is, however, made clear that looking to the peculiar facts of the case, the Court has adopted this course and it shall not be treated as precedent." 13. This Court in the case of Commissioner of C. Ex & Cus. Surat-I vs. Harish Silk Mills reported in 2010(255) E.L.T. 393 (Guj.) also decided this very question. The issue raised before the Court was that the assessee did not comply with the pre-condition of payment of duty with interest and 25% of penalty w....
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....authority to pass a fresh order giving option to the assessee to pay the duty amount within 30 days by making it explicitly clear in the order itself that if the assessee wants to avail such option he is permitted to do so. In the case on hand since the duty amount has already been paid by the respondent assessee and if the interest and/or reduced penalty of 25% were not paid by the respondent assessee, the adjudicating authority may send a communication to the respondent assessee indicating therein that the particular amount of interest and/or 25% of the penalty of the duty amount is not paid by the respondent assessee and hence if the assessee wants to avail the benefit of the reduced penalty of 25%, such amount of interest and/or penalty of 25% should be paid within 30 days from the date of receipt of such communication, failing which they would be liable to pay penalty under Section 11AC equivalent to the amount of duty. 11. Before parting, we observe that the order passed by the Tribunal cannot be said to be a non-speaking and non-reasoned order. The authorities cited by Mr.Oza in support of his submission that a non-speaking order is passed by the Tribunal and hence it deser....