TMI Blog2013 (6) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the quantum of penalty and penalty equal to the duty must be imposed once section 11Ac is made applicable. - Decided in favor of revenue. - Central Excise Appeal No.5 of 2005 - - - Dated:- 8-11-2012 - Sunil Ambwani And Aditya Nath Mittal, JJ. ORDER 1. We have heard Shri Ashok Singh for the appellant and Shri Sharad Malviya for the respondent-assessee. 2. This Central Excise Appeal under Section 35-G of the Central Excise Act, 1944 arises out of an order passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (the Tribunal) dated 25.6.2004 dismissing the appeal and confirming the order of the Commissioner of Appeals, by which he had set aside the penalty levied on the respondents in view of the judgment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, Central Excise, Division Ghaiabad passed an order adjudicating the matter, after giving personal hearing and going through the reply. He found that the respondent had sound business in financial years 1999-2000; 2000-01, as compared to Financial Year 1997-98 and 1998-99. By the order in original dated 28.2.2002 the penalty of Rs.45,00,000/- was confirmed. 6. The respondent filed an appeal before the Commissioner (A), Central Excise, Ghaziabad. He allowed the appeal on 14.11.2003 relying upon the decision of CEGAT, Mumbai, by which the provisions of Rule 96ZQ for levy of penalty were held to be ultra vires. Aggrieved the Commissioner of Central Excise, Ghaziabad filed an appeal in the Tribunal, which has been dismissed. 7. This ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1999-2000 and 2000-01. The production in metric tonnes in these two years was 2378551.5 q.mtrs. in 1999-2000 and 2374220.82 q.mtrs. in the year 2000-01, as compared to 36740.32 q.mtrs. in 1997-98 and 405292.50 q. mtrs. in 1998-99, and the ground of default was non-existing. 10. The sub-rule (3) of the Rule 96ZQ of the erstwhile Rule reads as follows:- "The amount of duty payable under sub-rule (1) shall be paid by the 5th of each calendar month". 11. Sub-rule (5) of the Rule 96ZQ reads as under:- "If any independent processor fails to pay the amount of duty or any part thereof by the date specified in sub rule (3), he shall be liable to- a) Pay the outstanding amount of duty along with interest at the rate of thirty six perc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions as enumerated in Section 11AC, the penalty equal to the amount of duty determined is mandatory and there is no discretion in the Tribunal to reduce the said penalty. However, as laid down by the apex Court in Union of India Vs. Rajasthan Spinning and Weaving Mills (supra), the penalty under section 11AC can be imposed only when conditions mentioned in Section 11AC exist. The authorities have no discretion in fixing the quantum of penalty and penalty equal to the duty must be imposed once section 11Ac is made applicable. In view of the foregoing discussions, the question of law is answered in favour of the revenue in following manner. "The appellate Tribunal had no discretion to reduce the amount of penalty as specified under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) was based upon the concession in which learned counsel for the State submitted that the State can levy penalty equal to ten times amount of entry tax as maximum limit and has not fixed any amount of penalty leaving no discretion for imposition of lesser penalty. The Supreme Court found that the State itself conceded that the assessing authority is not bound to levy fixed penalty equal to ten times. 15. In the present case it is admitted that the penalty was leviable as the compounded amount was not deposited by 10th of the month on which the penalty was leviable equal to the amount of excise duty. The question whether there is any discretion to levy penalty was considered by this Court in Commissioner of Customs and Central Excise v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assessees it was also submitted that Sections 11A and 11AC not only operate in different fields but the two provisions are also separated by time. The penalty provision of Section 11AC would come into play only after an order is passed under Section 11A(2) with the finding that the escaped duty was the result of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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