2012 (1) TMI 189 - HC - Central Excise

Summary

Issues Involved:
The issues involved in the judgment are:
1. Whether the Tribunal was right in setting aside the order despite a pending decision in another case?
2. Whether the Tribunal was correct in setting aside the demand for interest and penalty when the statute mandates their imposition upon confirmation of the duty demanded?

Issue 1:
In the appeal, the appellant contended that the order passed by the Appellate Authority in reducing the interest and penalty in a related case was illegal and lacked jurisdiction. The High Court had upheld the Appellate Authority's decision in that case. The Supreme Court, in a connected appeal, established that authorities have no discretion in imposing penalties. Therefore, the High Court found the impugned order reducing the penalty and interest to be legally flawed. Consequently, the appeal by the department was allowed.

Issue 2:
The appellant argued that the Tribunal erred in setting aside the order despite a pending decision by the Supreme Court in another matter. The Supreme Court, in a related case, had clarified that authorities do not have discretion in imposing penalties. Given this legal position, the High Court found the Tribunal's decision to reduce the penalty and interest to be incorrect in law. Consequently, the High Court allowed the appeal by the department.