2006 (12) TMI 419 - AT - Central Excise

Summary

Issues: Penalty imposed on the assessee, lack of discussion on penalty payment in orders, legality of penalty imposition, need for reasoned and speaking order by Commissioner (Appeals).

In this judgment by the Appellate Tribunal CESTAT, Kolkata, the issue at hand was the quantum of penalty imposed on the assessee company. The learned Deputy Registrar argued that the penalty should not exceed the minimum prescribed by law, which is Rs. 10,000. Surprisingly, it was noted that there was no appearance from the respondent-company, and the orders did not mention any penalty payment by the assessee. Despite the absence of any penalty payment, the Commissioner (Appeals) strangely upheld the penalty without providing a reasoned and speaking order. The Tribunal found this approach to be perpetuating illegality and ordered the matter to be sent back to the Commissioner (Appeals) for a thorough examination. The Commissioner was directed to determine if any penalty was paid and, if so, to mention it in the revised order. If it was found that no penalty was imposable, the mere token payment by the assessee does not legitimize the imposition of penalty. The Commissioner was instructed to revise the order accordingly and pass a speaking order in compliance with the law. Consequently, the first appellate order was set aside, and the appeal was remanded with modifications as directed.

This judgment emphasizes the importance of a thorough examination and a reasoned order by the Commissioner (Appeals) when dealing with penalty imposition. It highlights the need for clarity and legality in the decision-making process, ensuring that penalties are imposed in accordance with the law and supported by proper documentation and justification. The Tribunal's decision to remand the matter for further examination underscores the significance of procedural correctness and adherence to legal principles in tax matters.