2017 (2) TMI 1265 - HC - Central Excise

Reduction in quantum of penalty - Whether on the facts and in the circumstances of the case the Tribunal was justified in law in reducing the quantum of penalty levied under Section 11AC of the CEA, 1944? Held that - We fail to appreciate how the appellant can be said to be aggrieved by such direction. If at all, any person can be said to be aggrieved, he can be said to be the assessee. In any case, when the assessee has not challenged the impugned order and nothing is on record that any amount was paid either before issuance of show cause notice or even within 30 days of communication of the order of determination of duty we rest the matter there - present appeal fails and same deserves to be dismissed - decided against petitioner.

Summary

Issues Involved:
Reduction of penalty under Section 11AC of the Central Excise Act, 1944 based on the Delhi High Court decision in the case of Malbro Appliance Pvt. Ltd.

Detailed Analysis:

Issue 1: Reduction of Penalty under Section 11AC
The case involved an appeal against the judgment of the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad, where the Tribunal had partially allowed the appeal by reducing the penalty to 25% of the duty amount based on the decision of the Delhi High Court in the case of Malbro Appliance Pvt. Ltd. The main question of law was whether the Tribunal was justified in law in reducing the quantum of penalty levied under Section 11AC of the Central Excise Act, 1944.

Analysis: The Tribunal confirmed the demand of duty but accepted the respondent assessee's request to reduce the penalty to 25% of the duty amount paid before the issuance of the show cause notice, in line with the Delhi High Court decision. The Tribunal considered Section 11AC of the Act, which allows for a penalty reduction to 25% of the duty amount if paid within 30 days of the communication of the duty determination order. The Tribunal correctly applied this provision and the Delhi High Court decision in reducing the penalty. The appellant's contention of being aggrieved by the direction was dismissed as the appellant had not challenged the order, and there was no evidence of any payment made by the assessee either before the show cause notice or within 30 days of the duty determination order.

Conclusion: The High Court upheld the Tribunal's decision, stating that there was no reason to interfere with the judgment and order passed by the Tribunal. The appeal was dismissed, and the question framed was answered against the revenue and in favor of the assessee.

This detailed analysis of the judgment highlights the application of Section 11AC of the Central Excise Act and the significance of the Delhi High Court decision in determining the reduction of penalties in excise duty cases.