2017 (9) TMI 23

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....s issued on 30.12.2002 to the company and the Directors to show cause why duty/cenvat credit amounting to Rs. 2,02,71,180/be not reversed for the period between December 1997 to August 2001 in respect of clearance of inputs, semi finished goods and finished goods by the company with interest and penalty under section 11AC of the Central Excise Act, 1944 ("the Act" for short). The show cause notice also contained proposal for personal penalties. 3. After giving the opportunity of being heard to the company and other noticees, the Commissioner of Central Excise and Customs, Vadodara by his order dated 25.6.2004 confirmed the duty demand of Rs. 3,53,268/already paid and further confirmed duty demand of Rs. 1,17,46,218/against the company. H....

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....ished goods and also subject to the legal provisions prevailing at the time. We are also of the view that penalty of Rs. 1,20,99,486/on M/s. Nirayu Pvt. Ltd. and penalties of Rs. 1,00,000/each on M/s. Darshak Ltd., M/s. Alembic Ltd and M/s. Paushak Pvt. Ltd are excessive, though removal of duty paid inputs in contravention of rules and without payment of duty warrants imposition of some penalty. Accordingly, we reduce the penalty of M/s. Nirayu Pvt. Ltd to Rs. 5,00,000/3 7 The penalties on M/s. Dharak Ltd. M/s. Alembic Ltd and M/s. Paushak Ltd are also reduced to Rs. 20,000/each." 4. In this context, while admitting the appeal, the Court had framed the following substantial question of law : "Whether the penalty under Section 11....

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....und that the penalty was excessive. Without recording any reason for coming to such a conclusion, the Tribunal reduced the penalty to Rs. 5,00,000/. Section 11AC of the Act pertains to penalty for shortlevy or nonlevy of duty in certain cases. At the relevant time, part of the said section relevant for our purpose read as under : "11AC Penalty for shortlevy or nonlevy of duty in certain cases :Where any duty of excise has not been levied or paid or has been shortlevied or shortpaid or erroneously refunded by reasons of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liab....