TaxTMI 
TaxTMI 
2015 (10) TMI 509
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the first and second proviso to Section 11AC of the Central Excise Act, 1944 with regard to the payment of penalty to the tune of 25%. This question has been settled by a decision of this Court dated 09.08.2012 in Central Excise Appeal Deffective No. 23 of 2012, M/s Kotsons Ltd. Vs. Asstt. Commissioner, Central Excise and another as well as a decision of this Court dated 30.09.2015 in Civil Misc. Writ Petition (Tax) No. 1661 of 2009, M/s Chandra Kamal Corporation and another Vs. Union of India and others. In the instant case, the operrative portion of the order in original is extracted hereunder: "I confirm the demand of Central Excise duty amounting to Rs. 93,112.00 (BED-Rs.69,600.00+ Education Cess-Rs. 1392.00+Secondary & Higher Educ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity could not demand more than 25% of the duty amount by way of penalty, in view of the first proviso to Section 11AC of the Act. Based on the said order of the Delhi High Court, the Central Board of Excise and Customs issued a circular dated 22.5.2008. For facility, the said circular is extracted hereunder: "F. No.208/07/2008-CX-6 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs *** New Delhi dated the May 22 , 2008 To The Chief Commissioner of Central Excise (All) The Chief Commissioner of Customs and Central Excise (All) The Director Generals (All) The Commissioner of Central Excise (All) The Commissioner of Central Excise (Appeals) (All) Subject: Observation of Delh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee as rightly pointed out by Delhi High Court and therefore, the assessee should be made aware of the option available to him. 3. In view of the points as discussed above, Board has decided that in all the cases, wherein penalty under section 11AC of the Act is imposed, the provisions contained in first and second proviso to section 11AC should be mandatorily mentioned in the Order-in-Original itself by the adjudicating authority. 4. The field formation may be suitably informed . Yours faithfully , ( Rahul Nangare ) Under Secretary to the Government of India" The Central Board of Excise and Customs clarified that the proviso to Section 11AC was specifically inserted to ensure speedy recovery of the disputed amount and consequent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d proviso of Section 11AC of the Act so that an incentive is given to the assessee to pay the duty and interest within the stipulated period in order to avail payment of duty at reduced rate of 25%, failing which, the total amount of penalty becomes payable. This option was not given in the instant case and, therefore, to that extent the order in original imposing penalty is in violation of the first proviso to Section 11AC of the Act. We also find that the quantum of penalty so determined was equivalent to 100% of the duty payable. This is not in consonance with the first proviso to Section 11AC of the Act. The first proviso to Section 11AC of the Act mandates that 25% of penalty would be payable by the assessee, if duty and interest so d....