2009 (6) TMI 809 - AT - Central Excise

Summary

Issues: Duty confirmation based on clandestine removal, penalty imposition under Section 11AC of Central Excise Act, 1944, reduction of penalty amount, applicability of provisos to Section 11AC, interpretation of Supreme Court judgments on penalty reduction.

The judgment confirms the duty of Rs. 2,12,698 against the appellant for clandestine removal, supported by shortages detected and statements admitting illicit removal. Additionally, a penalty of an equal amount is imposed under Section 11AC of the Central Excise Act, 1944.

Regarding the reduction of penalty, the appellant's consultant acknowledges the duty confirmation and requests a reduction in the penalty imposed under Section 11AC, as the duty was paid along with interest before the show cause notice. However, the consultant's plea is opposed, citing a Supreme Court decision in the case of UOI v. Dharamendra Textile Processors.

The judgment analyzes the Assistant Commissioner's order, which states that the penalty under Section 11AC would be reduced to 25% if the duty and interest are paid within 30 days. Despite the appellant depositing the duty and interest before the show cause notice, the 25% penalty reduction condition is not fulfilled. Referring to the Supreme Court's decision in M/s. Dharamendra Textile, the judgment concludes that once Section 11AC is invoked, authorities have no discretion to reduce the penalty. Consequently, the plea to reduce the penalty is dismissed, upholding the 100% penalty imposed in the impugned order, leading to the rejection of the appeal.