2014 (11) TMI 745

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....: (i)      Whether on the facts and in the circumstances of the case, the CESTAT was correct in setting aside the appeal filed by the Department regarding imposition of mandatory penalty under Rule 57-I(4) and Section 11AC for the entire period subsequent to 28-9-1996? (ii)    Whether the CESTAT was correct in setting aside the appeal filed by the Department when the entire duty demanded has been paid by the first respondent in accordance with the Additional Commissioner's Order No. 24 of 2003, dated 13-6-2003? 2. The respondent/assessee was issued with a show cause notice dated 17-8-1999 demanding duty of Rs. 3,19,033/- on the allegation that they have not reversed the Modvat credit ava....

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.... payment of duty and not where it is a lapse of not reversing the credit. Further, the Appellate Authority observed that the mandatory penalty under Rule 57-I(4) of the Central Excise Rules, 1944 as imposed by the lower authority for the period earlier to 28-9-1996 is not correct and cannot be sustained. The penalty under Rule 173Q was also vacated. Aggrieved by such order dated 20-4-2000 vacating the penalty, the Revenue preferred appeal to the Tribunal. The Revenue, in their memorandum of grounds before the Tribunal contended that that portion of the order passed by the Appellate Authority, dated 20-4-2000, wherein it set aside the order of the Original Authority imposing mandatory penalty under Rule 57-I(4) of the Central Excise Rules, 1....

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....e period subsequent to 28-9-1996. The Tribunal did not venture to examine this question but merely stated that it need not interfere with the decision of the lower appellate authority. 5. We have perused the grounds of appeal filed by the Revenue before the Tribunal, from which it is seen that the Department has contested the matter regarding imposition of penalty prior to the date of introduction of the said provision, viz., 57-I(4) of the Central Excise Rules, 1944 and thereafter. Therefore, the Revenue having raised such a ground before the Tribunal, the Tribunal ought to have considered the issue and rendered a finding. Without doing so, the Tribunal merely observed that they need not interfere with the decision of the lower app....