2008 (4) TMI 593 - AT - Central Excise

Summary

Issues:
1. Appeal against modification of penalty by Commissioner (A) from Rs. 1 lakh to Rs. 25,000 under Rule 173Q of Central Excise Rules.

Analysis:
The judgment pertains to a revenue appeal challenging the modification of a penalty by the Commissioner (A) from Rs. 1 lakh to Rs. 25,000 under Rule 173Q of the Central Excise Rules. The Commissioner (A) had confirmed the duties paid by the assessee and reduced the penalty after finding a reasonable cause for the reduction. The revenue contended that the Tribunal had remanded the matter as an open remand, and therefore, the Adjudicating Authority rightly imposed the higher penalty, which was not confirmed by the Commissioner (A).

Upon careful consideration, the Tribunal emphasized that the Appellate Authority possesses inherent powers under Section 35A of the Central Excise Act to enhance, reduce, set aside, or modify orders. It was highlighted that Rule 173Q itself grants inherent powers to the Appellate Authority to exercise discretion in such matters. The Tribunal rejected the contention that the Appellate Authority lacked the power to reduce the penalty imposed under Rule 173Q, affirming that the Commissioner (A) had the jurisdiction to modify or set aside orders passed by the Adjudicating Authorities. The judgment emphasized that the Commissioner (A) did not commit any infirmity in exercising the power to reduce the penalty, and hence, the appeal was dismissed.

In conclusion, the judgment clarifies the authority of the Commissioner (A) to modify penalties under Rule 173Q and affirms the inherent powers granted under Section 35A of the Central Excise Act for such modifications. The decision underscores the discretionary powers of the Appellate Authority in revising penalties and upholds the Commissioner (A)'s jurisdiction in reducing penalties based on reasonable causes, thereby dismissing the revenue's appeal against the penalty modification.