2004 (11) TMI 433 - AT - Central Excise

Summary

Issues:
1. Appeal against demand of interest under Section 11AB of CE Act.
2. Appeal against enhancement of penalty by the Commissioner (Appeals).

Issue 1:
The judgment involves an appeal concerning the demand of interest under Section 11AB of the CE Act. The Commissioner (Appeals) set aside the demand of interest, noting that Section 11AB does not have retrospective effect and citing a Tribunal ruling in a previous case. This ruling was confirmed by the Supreme Court, as mentioned in a reported case. The Tribunal, after hearing arguments from both sides, upheld the Commissioner's decision, stating that the demand of interest under Section 11AB was rightly rejected based on the previous judgment and the Supreme Court's dismissal of the Department's appeal. The Tribunal found no merit in the Revenue's appeal and dismissed it.

Issue 2:
The second issue in the judgment pertains to the appeal against the enhancement of penalty by the Commissioner (Appeals) from Rs. 50,000 to Rs. 1,25,000. The appellants argued that the penalty could not be increased without proper notice and adjudication. They relied on a Tribunal case precedent which held that penalty enhancement without due process is impermissible. The Tribunal agreed with the appellants, stating that the Commissioner (Appeals) lacked the authority to enhance the penalty without following the proper legal procedures. Therefore, the Tribunal set aside the penalty enhancement, allowing the party's appeal and providing for consequential relief if necessary.

In conclusion, the judgment addressed two main issues: the demand of interest under Section 11AB of the CE Act and the enhancement of penalty by the Commissioner (Appeals). The Tribunal upheld the decision to set aside the demand of interest based on the lack of retrospective effect of Section 11AB and previous legal precedents. Additionally, the Tribunal ruled in favor of the party regarding the penalty enhancement, emphasizing the necessity of due process and proper adjudication before increasing penalties.