2011 (4) TMI 135 - AT - Central Excise

U/s 11AC - Option for 25% of the penalty amount - Allowing the benefit of cum-duty assessment As per the order of the Hon ble Delhi High Court in the case of K.P. Pouches (P) Ltd. Vs. UOI (2008 -TMI - 30328 - HIGH COURT OF DELHI) and in accordance with the provisions of Section 11AC of the Central Excise Act, 1944 - The appeal is allowed by way of remand.

Summary

Issues Involved:
- Duty payment discrepancy
- Penalty amount calculation
- Benefit of cum-duty assessment
- Application of Section 11AC of the Central Excise Act, 1944

Duty Payment Discrepancy:
The appellant contended that they had paid an additional amount towards duty and penalty, which was not considered by the authorities below. The advocate argued that the appellant should have been given the choice of paying 25% of the penalty amount as per the decision of the Hon'ble Delhi High Court in a specific case. The department acknowledged the duty payment but highlighted that to avail the penalty benefit, interest on the duty must also be paid. The Tribunal, after considering both sides, set aside the impugned order and remanded the matter to the original authority for re-determining the duty amount, taking into account the payments claimed to have been made towards duty and penalty, subject to verification.

Penalty Amount Calculation:
The appellant had paid a significant amount towards penalty, and the advocate argued that they should have been given the choice of paying 25% of the penalty amount as per the relevant legal provision and the decision of the Hon'ble Delhi High Court. The department did not object to granting the benefit of cum-duty assessment but emphasized the requirement of paying interest on the duty to avail the penalty benefit. The Tribunal directed the original authority to give the appellants the option for 25% of the penalty amount as per the Delhi High Court's decision and Section 11AC of the Central Excise Act, 1944.

Benefit of Cum-Duty Assessment:
The advocate for the appellants pleaded for the benefit of cum-duty assessment, which had not been provided by the authorities below. The department had no objection to granting this benefit and agreed to remand the matter for fresh determination on that ground to the original authority. The Tribunal, considering the submissions, allowed the appeal by remanding the matter to the original authority for re-determining the duty amount after extending the benefit of cum-duty assessment.

Application of Section 11AC of the Central Excise Act, 1944:
The issue of applying Section 11AC of the Central Excise Act, 1944, arose concerning the penalty calculation. The appellant sought the benefit of paying 25% of the penalty amount as per this legal provision and a specific court decision. The department highlighted the requirement of paying interest on the duty to avail this penalty benefit. The Tribunal directed the original authority to provide the appellants with the option for 25% of the penalty amount in accordance with the provisions of Section 11AC and the relevant court decision.

In conclusion, the Appellate Tribunal CESTAT, Chennai allowed the appeal by remanding the matter to the original authority for re-determining the duty amount, considering the payments made towards duty and penalty, and providing the appellants with the option for 25% of the penalty amount as per the legal provisions and court decisions cited. The appellants were also granted the benefit of cum-duty assessment, and they were to be given an adequate opportunity of hearing before a fresh order was passed.