TMI Blog2007 (2) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority had disallowed Cenvat credit of Rs. 1,03,360/-, ordered its recovery from the respondent along with the interest and imposed penalty of Rs. 25,840/-, which was 25% of the duty amount. The adjudicating authority held : Penalty of Rs. 25,840/- i.e. 25% of the duty amount had also been deposited on 29-7-2003 along with the interest of Rs. 7012/- vide TR-6 challan No. 5 dated 29-7-2003 . 3. The penalty @ 25% appears to have been imposed by the adjudicating authority in view of the provisions of the first proviso to Section 11AC, under which it was provided that where duty as determined under sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first proviso to Section 11AC of the said Act is reproduced below : Provided that where such duty as determined under sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty-five per cent of the duty so determined . 6.1 The first proviso to Section 11AC contemplates the penalty liability to be only of 25% of the duty determined in place of penalty equal to the duty determined. Therefore, in cases where the amounts are paid in accordance with the first proviso, there can arise no question of imposing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty on the appellant, as the question of penalty equal to the amount of duty cannot arise in such cases . 5. Following the ratio of the aforesaid Division Bench judgment, it is held that the Commissioner (Appeals) could not have set aside the penalty of 25% of the duty as imposed by the adjudicating authority under the first proviso to Section 11A of the Act. The impugned order of the Commissioner (Appeals), is, therefore, set aside and the order imposing penalty @ 25% on the present respondent stands restored. Since the penalty @ 25% of the duty amount was already deposited on 29-7-2003, as recorded in the order of the adjudicating authority, no question on its recovery can arise. The appeal is disposed of accordingly. (Order dict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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