2003 (12) TMI 381 - AT - Central Excise

Summary

Issues:
1. Interpretation of Section 11AC regarding the imposition of penalties by departmental officers.
2. Abatement claimed under Section 4(4)(d)(ii) of the Central Excise Act.

Issue 1: Interpretation of Section 11AC regarding the imposition of penalties by departmental officers

The appeals involved a common issue raised by the Revenue regarding the justification of the Commissioner (Appeals) in holding that no penalty under Section 11AC could be imposed by departmental officers until the amendment to Section 33 by the Finance Act, 1999 came into effect. The assessee contended that penalties could only be imposed with specific legal sanction, and the power to impose penalties by Central Excise officers was derived from Section 33 of the Central Excise Act. However, a detailed analysis of Sections 11A, 11AA, 11AB, and 11AC revealed that the scheme imposed liability for penalties under Section 11AC itself, without the necessity of recourse to Section 33. The Tribunal disagreed with the Commissioner (Appeals) on the applicability of Section 11AC for the period before the amendment of Section 33 by the Finance Act, 1999. The Tribunal modified the order, allowing the appeal filed by the Revenue on this issue.

Issue 2: Abatement claimed under Section 4(4)(d)(ii) of the Central Excise Act

Regarding the issue of abatement claimed under Section 4(4)(d)(ii) of the Central Excise Act, the Tribunal found that this issue was settled in favor of the assessee by previous decisions of the Tribunal and the Supreme Court. The Tribunal cited precedents like Srichakra Tyres Ltd. v. CCE, Madras and CCE v. Maruti Udyog Ltd., which supported the assessee's position. Consequently, the Tribunal found no merit in the Revenue's contention on this issue. The Tribunal upheld the decision in favor of the assessee on the abatement claimed under Section 4(4)(d)(ii) of the Central Excise Act.

In conclusion, the Tribunal allowed the appeal filed by the Revenue regarding the interpretation of Section 11AC, modified the Commissioner (Appeals)'s order, and rejected the prayer in the cross-objection for reducing the quantum of penalty. The appeals and cross-objections were disposed of accordingly.