2010 (12) TMI 1137 - AT - Central Excise

Summary

Issues: Rectification of mistake in the order related to penalty reduction under Section 11AC of the Central Excise Act, 1944.

In this case, the Tribunal received an application from the Revenue seeking rectification of a previous order where it was stated that if the appellant paid duty, interest, and 25% of the duty amount towards penalty within 30 days, the penalty would be reduced to 25% of the duty as per Section 11AC of the Central Excise Act. The Revenue argued that the original order was issued in 1998, before the introduction of the provision for reduced penalty within 30 days. However, the appellant pointed out Explanation-I of Section 11AC, which clarified that the provision also applies to cases where the duty determination order relates to notices issued before the introduction of the new Section 11A in 2000. The Tribunal had upheld the duty demand in an order from 2006, which falls under the new Section 11AC. Therefore, the Tribunal concluded that the explanation covers the matter, and there was no mistake in the original order to rectify. The duty determination under Section 11A(2) was done after 2000, making the explanation to Section 11AC applicable. Consequently, the Tribunal found no merit in the Revenue's application for rectification of mistake and rejected it.

This judgment clarifies the application of Section 11AC of the Central Excise Act, 1944, regarding the reduction of penalties if payment is made within 30 days of the order. The Tribunal's analysis focused on the timing of the duty determination order, emphasizing that even if the original notice was issued before the new provision in 2000, if the duty determination occurred after 2000, the new Section 11AC would apply. The Tribunal's interpretation of the explanation to Section 11AC highlights the importance of the timing of duty determination in determining the applicability of penalty reduction provisions. This decision provides clarity on the retrospective application of penalty provisions in cases where duty determination orders are issued before the introduction of relevant statutory amendments.