2010 (2) TMI 1153 - AT - Central Excise

Summary

Issues involved: Appeal against reduction of penalty u/s 11AC of Central Excise Act 1944.

The Appellate Tribunal CESTAT NEW DELHI heard the appeal where the Revenue challenged the reduction of penalty u/s 11AC of the Central Excise Act 1944. The Revenue argued that once duty is confirmed under Section 11AC, there is no discretion available for reducing the penalty. Reference was made to Rule 25 of the Central Excise Rule 2002 and Section 11AC of the Act as tools to deter misconduct through penalty imposition. It was emphasized that once the allegations are proven, penalty becomes leviable as per Section 11A of the Act.

The Tribunal considered the Revenue's arguments and referred to legal precedents, including the case of Union of India Vs. Rajasthan Spinning & Weaving Mills and Dharmendra Textile Processors. Following the principles laid down in these cases, the matter was remanded to the Adjudicating Authority for a fresh decision on the penalty elements, taking into account Section 11A provisions and the Supreme Court's rulings. It was clarified that if the elements of Section 11A are established, there is no room for discretion in reducing the penalty. The Adjudicating Authority was directed to provide a fair hearing to the appellant and decide the matter in accordance with the law and judicial decisions.

As a result of the remand for fresh decision on penalty elements, the stay application was disposed of by the Tribunal.