9911796707
TMI Blog2017 (9) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Directors to show cause why duty/cenvat credit amounting to Rs. 2,02,71,180/be not reversed for the period between December 1997 to August 2001 in respect of clearance of inputs, semi finished goods and finished goods by the company with interest and penalty under section 11AC of the Central Excise Act, 1944 ("the Act" for short). The show cause notice also contained proposal for personal penalties. 3. After giving the opportunity of being heard to the company and other noticees, the Commissioner of Central Excise and Customs, Vadodara by his order dated 25.6.2004 confirmed the duty demand of Rs. 3,53,268/already paid and further confirmed duty demand of Rs. 1,17,46,218/against the company. He levied such duty with interest. He also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions prevailing at the time. We are also of the view that penalty of Rs. 1,20,99,486/on M/s. Nirayu Pvt. Ltd. and penalties of Rs. 1,00,000/each on M/s. Darshak Ltd., M/s. Alembic Ltd and M/s. Paushak Pvt. Ltd are excessive, though removal of duty paid inputs in contravention of rules and without payment of duty warrants imposition of some penalty. Accordingly, we reduce the penalty of M/s. Nirayu Pvt. Ltd to Rs. 5,00,000/3 7 The penalties on M/s. Dharak Ltd. M/s. Alembic Ltd and M/s. Paushak Ltd are also reduced to Rs. 20,000/each." 4. In this context, while admitting the appeal, the Court had framed the following substantial question of law : "Whether the penalty under Section 11AC which is mandatory in nature (as held by Apex Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason for coming to such a conclusion, the Tribunal reduced the penalty to Rs. 5,00,000/. Section 11AC of the Act pertains to penalty for shortlevy or nonlevy of duty in certain cases. At the relevant time, part of the said section relevant for our purpose read as under : "11AC Penalty for shortlevy or nonlevy of duty in certain cases :Where any duty of excise has not been levied or paid or has been shortlevied or shortpaid or erroneously refunded by reasons of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under subsection( 2) of section 11A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions for applicability for applying section 11AC of the Act did not arise. In fact, the Tribunal sustained penalty but reduced the quantum clearly indicating that the grounds for imposition of penalty under section 11AC did exist. That being the position, it would simply not be open for the Tribunal to exercise discretionary powers to reduce the penalty. Penalty was mandatory and the Tribunal did not have discretion to reduce the amount as held by the Supreme Court in case of Dharamendra Textile Processors (supra). 10. In the result, question is answered in favour of the appellant department. Judgment of the Tribunal is set aside to the extent of reduction of penalty against the respondent company and that of the adjudicating authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
