2011 (12) TMI 537 - AT - Central Excise

Benefit of 25% of the penalty - Section 11AC of the Central Excise Act - time limitation - principles of natural justice - Held that - the authorities have not given an option to the appellant-assessee for paying reduced the penalty in terms of Hon ble Delhi High Court s decision in the case of K.P.Pouches 2008 (1) TMI 296 - DELHI HIGH COURT , the order-in-appeal is set aside and the matter is remanded to the lower appellate authority for fresh decision after giving an opportunity of hearing to both sides - appeal allowed by way of remand.

Summary

Issues:
Aggrieved parties challenging Order-in-Appeal on penalty reduction and demand drop, Benefit of penalty under Section 11AC, Limitation on demands, Natural justice violation, Remand for fresh decision.

Analysis:

1. Aggrieved Parties and Order-in-Appeal:
- Both parties, the appellant-assessee and the Revenue, are aggrieved by the Order-in-Appeal. The Revenue contends that the lower appellate authority unjustly dropped the demand and reduced the penalty. The appellant-assessee's grievances include not receiving the benefit of 25% penalty reduction under Section 11AC and the non-consideration of limitation issues. Additionally, they argue that natural justice was violated by not granting an opportunity for cross-examination.

2. Benefit of Penalty under Section 11AC:
- The appellant-assessee asserts that they were entitled to a 25% penalty reduction as per Section 11AC of the Central Excise Act. They rely on the decision of the Hon'ble Delhi High Court in a specific case to support their claim.

3. Limitation on Demands:
- The issue of limitation arises as demands were made after the extended period of five years in some cases. The appellant-assessee raises this point, indicating that the lower appellate authority failed to consider this aspect in their decision-making process.

4. Violation of Natural Justice:
- The appellant-assessee argues that the principles of natural justice were not followed, specifically mentioning the lack of opportunity for cross-examination. This violation is highlighted as a ground for their dissatisfaction with the lower appellate authority's decision.

5. Remand for Fresh Decision:
- Considering the contentions from both sides and the dissatisfaction with the impugned order, the Tribunal sets aside the order-in-appeal. The matter is remanded to the lower appellate authority for a fresh decision. The Tribunal directs the lower authority to provide an opportunity for both parties to be heard and to consider the cited case law, particularly the decision of the Hon'ble Delhi High Court. Both appeals are allowed by way of remand, and the cross-objection filed by the assessee is disposed of accordingly.

This detailed analysis of the judgment addresses the various issues raised by the parties, the legal principles involved, and the Tribunal's decision to remand the matter for a fresh decision, ensuring due process and consideration of relevant case law.