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2013 (3) TMI 338 - HC - Central ExciseWhether the appellate Tribunal could reduce the penalty amount, which is less than the amount of penalty specified under section 11 AC of the Central Excise Act, 1944 - Mandatory penalty u/s 11AC - Held that:- The decision in Dharamendra Textile [2008 (9) TMI 52 - SUPREME COURT] must be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under Sub-section (2) of Section 11A. That is what Dharamendra Textile decides. From the proposition as laid down in above cases, it can be concluded that the quantum of the penalty equal to the duty determined as contemplated by Section 11AC is mandatory and there is no discretion in the adjudicating authority or the Tribunal to impose different amount of penalty. In a case where penalty is leviable under section 11AC on fulfilment of the conditions as enumerated in Section 11AC, the penalty equal to the amount of duty determined is mandatory and there is no discretion in the Tribunal to reduce the said penalty. However, as laid down by the apex Court in Union of India Vs. Rajasthan Spinning and Weaving Mills (2009 (5) TMI 15 - SUPREME COURT OF INDIA), the penalty under section 11AC can be imposed only when conditions mentioned in Section 11AC exist. The authorities have no discretion in fixing the quantum of penalty and penalty equal to the duty must be imposed once section 11Ac is made applicable. The question of law is answered in favour of the revenue as the appellate Tribunal had no discretion to reduce the amount of penalty as specified under section 11 AC.
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