TMI Blog2009 (7) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... ent appeal. 2. I have heard learned SDR Shri Samir Chitkara. Nobody is present for the respondents. 3. It is seen that the Original Adjudicating Authority confirmed the demand of duty of Rs. 2,19,157/-, against the assessee on the findings of clandestine removal along with confirmation of interest in terms of provisions of Section 11AB. In addition, penalty of identical amount was imposed under Rule 25 of erstwhile Central Excise Rules, 2001, read with Section 11AC. On appeal against the above order, Commissioner (Appeals) upheld duty and interest confirmation. He also upheld penalty of 100% duty amount in terms of Section 11AC but gave an option to the assessee to pay reduced penalty along with interest within a period of 30 days of the receipt of his order, subject to which the balance amount of penalty would be set aside. On the other hand, it is the Revenue s contention that the provisions of Section 11AC having been upheld against the respondents, the benefit of first proviso to Section 11AC is applicable only when the entire duty, interest and 25% of penalty is paid within a period of 30 days of the order passed by the Central Excise officers, in terms of sub-section (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso As is clear from the above proviso, the benefit of reduced penalty is required to be extended when duty interest and 25% of penalty is paid within a period of 30 days from the date of communication of the Central Excise Officer determining such duty. The question arises as to at which point of time, such determination can be said to have taken place i.e. from the order of the Original Adjudicating Authority or the order of Appellate Authority. The answer to this question also lies in the proviso itself, when it refers to duty determination under sub-section (2) of Section 11A. Sub-section (2) of Section 11A refers to duty determination by the Central Excise Officer against a person on whom notice is served under sub-section-I. As such, it becomes clear that the order referred in the proviso to Section 11AC, is the first order of determination of amount of duty due from a person to whom notice has been issued. To avail the benefit of the said proviso to Section 11AC, the duty so determined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the higher appellate forum and the same is paid within a period of 30 days from the date of communication of appellate order. This shows that the requirement of payment of 25% of penalty in the first proviso is only in relation to penalty imposed by the Original Adjudicating Authority and not in respect of the final order passed by the appellate authorities. The above third and fourth provisos clearly show that, in case of any increase in penalty by the higher appellate forum, the period of 30 days would start from the date of communication of that order in respect of such increased penalty. This indicates that the period of 30 days mentioned in the first proviso is relatable to adjudication order passed by first authority. As such, the order of Commissioner (Appeals) granting benefit of first proviso to the respondents by giving them option to deposit 25% of penalty within a period of 30 days from the date of communication of his order, is not in strict consonance with the provisions of Section 11AC read with the provisos. 7. I also find that appellate authority reference to Section 35F is not called for as both the Sections operate in different fields. Section 35F deals with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of first proviso was suo motu available to the assessee who could have invoked the same at his own and availed the benefit without any such option having been given to him by the adjudicating authority, who imposed 100% penalty under the main clause of Section 11A without invoking the first and second proviso. The Hon ble High Court of Punjab Haryana in their recent judgment in the case of Commissioner of Central Excise v. J.R. Fabrics (P) Limited [2009 (238) E.L.T. 209 (P H)], after taking note of Dharamendra Textiles decision of the Hon ble Supreme Court, has observed as under in Para 12 14 of their judgment :- 12. The order in original also imposes penalty of Rs. 5,10,955/- which is equal to the amount of duty of excise assessed by the Adjudicating Authority. It is thus evident that acting on 2nd proviso the amount of penalty to the extent of 25% could not have been deposited and order was passed by the Adjudicating Authority in derogation of the express provision made by the 2nd proviso and there was no opportunity for the dealer-respondent to deposit 25% of the amount. Accordingly he challenged the order in appeal where again the demand of penalty equivalent to duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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