TaxTMI 
TaxTMI 
2014 (12) TMI 863
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....umstance where an assessee did not pay duty at the time of removal/clearance from factory but paid a part of duty prior to show cause notice and the remaining part after the issue of show cause notice? 2. Whether the CESTAT is correct for holding that penalty under Section 11AC cannot be invoked where part of duty demanded is paid even after the issue of show cause notice? 3. Whether the Hon'ble CESTAT is justified in law by holding a logic that since the assessee had paid a major part of the duty demanded before the issue of Show Cause Notice, Section 11AC is not invokable, particularly when there is no power of discretion on the quasi-judicial authorities to reduce or waive penalty in the light of the Apex Court's decisions ....
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....ct, 1944. 3. Aggrieved by the order of the Original Authority waiving the imposition of mandatory penalty, the Revenue filed an appeal before the Commissioner (Appeals), who allowed the appeal by way of remand in relation to imposition of penalty under Section 11AC of the Central Excise Act for the period 28.9.1996 to 31.3.1997. On remand, penalty was imposed under Section 11AC and that was challenged before the Commissioner (Appeals) by the first respondent/assessee and the Commissioner (Appeals) allowed the appeal and set aside the penalty levied under Section 11AC of the Central Excise Act. Aggrieved by such an order, the Department filed an appeal before the Tribunal, which upheld the order of the Commissioner (Appeals) in sofar as l....
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....tion was passed, Section 11AC is not liable to be invoked for imposing penalty on the assessee according to the Hon'ble High Court in JKON Engineering (Supra), wherein their Lordships were dealing with a question of law referred to the Hon'ble High Court by this Tribunal. The High Court's decision was also relied on by this Bench in arriving at a conclusion in para(4) ibid. 4. For the reasons stated herein before, para (4) of the final order requires to be restructured as follows:- "Notwithstanding to the above controversy, it is an admitted fact that a major part (Rs.2,03,750/-) of the duty demanded by the original authority (Rs.2,78,405/-) had been paid by the assessee prior to issue of the show-cause notice. The remaini....
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....upreme Court in the decision reported in 2008 (231) E.L.T. 3 (S.C.) (Union of India V. Dharamendra Textile Processors), held as follows: "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. 27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (Supra) has analysed the legal position in the c....