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2014 (12) TMI 654 - HC - Central ExciseImposition of penalty - Section 11AC - non levy of penalty or levy of penalty below the minimum limit prescribed - Applicability of decision of Supreme Court in the case of Union of India and Others V. M/s Dharamendra Textile Processors and Others reported in [2008 (9) TMI 52 - SUPREME COURT ] - Held that:- Decision was rendered by the Supreme Court on 29.9.2008. At the time of admission of these appeals, this Court did not have the benefit of this decision. Apparently, the Tribunal was also deciding the issue on the basis of law that was prevailing at that point of time and the various Tribunals took a view that the element of discretion was available while imposing penalty under Section 11AC of the Central Excise Act. Since that issue stands resolved by the Larger Bench of the Supreme Court, the first substantial question of law admitted by this Court does not bear any significance, since the levy of penalty under Section 11AC, has therefore become mandatory, nevertheless, the Tribunal has chosen to impose lesser amount of penalty, against which the Department has not filed any appeal. - Decided against the assessee. Levy of interest - Section 11AB - Held that:- Appellant contended that Section 11AB could not be invoked for the period prior to the enactment of Finance Bill, 2001, to mean thereby, prior to 2001, Section 11AB was not applicable. The provisions of Section 11AB of the Central Excise Act came into effect from 28.9.1996 by Finance (No.2) Act, 1996. No doubt that in the year 2001, there is a change in the rate of interest from 11.5.2001 from 10% - 36% to 18% - 36% that is irrelevant. Therefore, the plea of the appellants that the Tribunal ought not to have been imposed interest under Section 11AB of the Central Excise Act is misconceived. - Decided against the assessee. once Penalty is imposed under Rule 173Q of the Central Excise Rules, no penalty could be imposed under Section 11AC of the Central Excise Act, when Section 11AC was introduced by Finance (No.2) Act, 1996 with effect from 28.9.1996, there is no bar in Section 11AC of the Central Excise Act to impose of penalty under Rule 173Q of the Central Excise Rules. Nevertheless, when Finance (No.2) Act 1996 brought in amendment by way of introduction of Section 11AC and other provisions, there was no corresponding amendment to Rule 173Q holding that if penalty is leviable under Section 11AC, no penalty could be levied under Rule 173Q of the Central Excise Rules. - The penalty under Rule 173Q of the Central Excise Rules is consequent to confiscation of goods, whereas penalty under Section 11AC of the Central Excise Act is equivalent to the duty determined. Therefore, there appears to be no mutual exclusion in relation to levy of penalty under Rule 173Q and Section 11AC. Accordingly, we answer the third substantial question of law in favour of the Revenue and against the assessee. - Decided against assessee.
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