TMI Blog2017 (9) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... not have discretion to reduce the amount as held by the Supreme Court in case of Dharamendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT] - appeal allowed - decided in favor of appellant-Revenue. - Tax Appeal No. 89 of 2006 With Tax Appeal No. 116 of 2006 - - - Dated:- 24-8-2017 - Mr. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Appellant : Priyank P Lodha, Advocate For The Opponent : M/s Trivedi Gupta, Advocate ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These tax appeals arise out of a common judgment of the Tribunal dated 12.7.2005. 2. Facts in Tax Appeal No. 89/2006 are as under. The respondent company was engaged in manufacturing activity. A show cause notice was issued o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 5,00,000/. The Tribunal noted that the demand confirmed by the Commissioner related to clearance of duty paid input without payment of duty or reversal of credit and that therefore, the demand of duty has to be sizable. In the process while allowing the appeal of the company in part, the Tribunal made the following observations : 6. While confirming the order relating to the demand of the duty of ₹ 1,20,99,486/we are of the view that it will be harsh if the receipt units are not allowed to utilize the credit of duty to be paid by M/s. Nirayu Pvt. Ltd. We therefore, direct that the authorities below shall allow credit of the duty on such inputs to the receipt units subject to the condition that they have been utilized in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. The Tribunal in the appeal confirmed the duty demand but reduced the penalty to ₹ 1,00,000/against which department has preferred appeal. 6. No one appeared for the department. We have heard learned counsel Shri Joshi for the respondent company and perused the documents on record. What emerges is that the adjudicating authority confirmed the demand of duty on the ground of clearance of goods without payment of duty and therefore in breach of the rules. In fact, the adjudicating authority had held the clearances to be clandestine. The adjudicating authority also imposed penalty of matching amount under section 11AC of the Act. The Tribunal in the impugned judgment did not disturb these findings and in fact, gave its own rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld also be liable to pay a penalty equal to the duty so determined. The Supreme Court in case of Union of India v. Dharamendra Textile Processors reported in 2008(231) E.L.T.3(S.C.), considered such provision and came to the conclusion that the section provides for a mandatory penalty and leaves no scope of discretion for imposing lesser penalty. The said decision arose out of a reference made by the twoJudge Bench to a larger Bench. The threeJudge Bench of the Supreme Court held that the decision of the Supreme Court in case of Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai and anr. reported in 2007 (8) Scale 304, taking a contrary view did not lay down a correct law. 9. Issue is thus covered by virtue of three Judge Be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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