TMI Blog2010 (2) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. 2. The Commissioner of Central Excise Customs, Surat-I has filed this Tax Appeal under Section 35G of the Central Excise Act, 1944 proposing to formulate the following substantial question of law for determination and consideration of this Court; "Whether in the facts and circumstances of the case, the Tribunal is justified and has committed a substantial error of law in reducing the mandatory penalty imposed on the respondent-assessee under Section 11AC of Central Excise Act, 1944 to the extent of 25% despite having confirmed the duty on account of clandestine removal and evasion of Central Excise duty?" 3. Heard Mr. R.J. Oza, learned Standing Counsel appearing for the Revenue and perused the order passed by the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has mechanically passed order extending benefit of reduced penalty on the respondent. He has further submitted that the team of Central Excise Officers had carried search of the respondent's premise on 22-12-2001 and detected evasion of Central Excise duty pay able by the respondent as on the date of the said search. The respondent having faced with the situation deposited sum of Rs. 38,892/-, being duty liability, on 22-12-2001. The show cause notice was issued on 13-6-2002. The adjudicating authority has passed order dated 9-5-2(106 demanding duty of Rs. 2,53,856/- and also demanded interest at the appropriate rate from the respondent under Section 11AB of the Act and also imposed penalty of Rs. 2,53,856/- under Section 11AC of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case on hand are not identical to the facts of the case of the assessee in the Malbro Appliances P. Ltd. (supra). On the contrary, in view of settled proposition laid down by the Punjab and Haryana High Court in the case of Machino Montell (I) Ltd., reported in 2006 (202) E.L.T. 398 (P H) = 2006 (4) S.T.R. 177 (P H) as well as judgments of the Apex Court in the case of Rajasthan Spinning Weaving Mills, reported in 2009 (238) E.L.T. 3 (S.C.), Dharamendra Textile Processors, reported in 2008 (231) E.L.T. 3 (S.C.), and decisions of the Tribunal in the case of Jawala Steels Pvt. Ltd., reported in 2009 (238) E.L.T. 694 (Tri - Kolkata) and Ponneri Steel Industries, reported in 2009 (238) E.L.T. 295 (Tri - Chennai) and such other cases, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duty leviable on the respondent. All these aspects of the main question are already considered by this Court in its order dated 18-11-2009 in the case of Messers Exotic Associates v. Commissioner of Central Excise (Tax Appeal No. 572 of 2007 with Tax Appeal No. 869 of 2007 [2010 (252) E.L.T. 49 (Guj.)] and Tax Appeal No. 1942 of 2008, in the case of Commissioner of Central Excise Customs v. Rama Syn silk Mills P. Ltd., decided on 214-2010 [2010 (254) E.L.T. 277 (Guj.)]. This Court after considering the decision of Commissioner of Central Excise v. Malbro Appliances, 2007 (79) RLT 109 (Delhi), Union of India v. Dharamendra Textiles, 2008 (231) E.L.T. 3 (S.C.), Union of India v. Rajasthan Spinning Weaving Mills, 2009 (238) E.L.T. 3 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has not calculated the interest neither in the order-in-original nor even thereafter. It is, therefore too much to expect from the respondent-assessee to pay the interest along with the duty amount in absence of such calculation of interest. As far as statutory obligation of the adjudicating authority is concerned, the Central Excise Department itself has issued Circular on 22-5-2008 wherein it is clarified that in all cases wherein penalty under Section 11AC of the Act is imposed the provisions contained in the first and second proviso of Section 11AC should be mandatorily mentioned in the order-in-original itself by the adjudicating authority. it is, therefore, not open for the revenue to agitate this issue before the Court in contradic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the Departmental Appeal observed that the quantum of the penalty is to the extent at around 25% of the duty amount and does not call for any interference. The Tribunal is taking consistent view in the matters of penalty levied under Section 11AC and when the duty amount is paid before issuance of show cause notice, the penalty is reduced to 25% of the duty amount. If the duty amount with interest is not paid in time and even reduced penalty of 25% of the duty amount is not paid in time and option is not given to the respondent-assessee, we have taken the new that such option should be given to the assessee and period of 30 days would commence from the date of giving such option. In this view of the matter, no interference is called for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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