2011 (8) TMI 388 - AT - Central Excise

Penalty - Option of paying 25% of duty towards penalty - Revenue submitted that such an option would have been given only by the original adjudicating authority and further even if no option is given, respondent is required to exercise the right within thirty days by himself - This Tribunal has taken a view that where option is not given by the original adjudicating authority, such an option can be given by the appellate authorities. This view taken by this Tribunal has also been upheld by the Hon ble Gujarat High Court in the case of CCE Ahmedabad vs. M/s. Akash Fashion Prints Pvt. Limited reported in 2009 (93) RLT 471 (Guj.) - Hence, decided against the assessee.

Summary

Issues:
- Appeal against the decision of the Commissioner (Appeals) regarding penalty under Section 11AC of Central Excise Act, 1944.
- Whether the option of paying 25% of duty towards penalty should have been given by the original adjudicating authority or can be provided by the appellate authorities.

Analysis:
The judgment deals with an appeal by the Revenue against the decision of the Commissioner (Appeals) regarding the imposition of a penalty under Section 11AC of the Central Excise Act, 1944. The Commissioner (Appeals) had given the option to the respondents to pay 25% of the duty towards the penalty within thirty days of the order. The Revenue contended that such an option should have been provided only by the original adjudicating authority, and even if not given, the respondent should have exercised the right within thirty days on their own. The Tribunal, through Mr. B.S.V. Murthy, Member (Technical), considered the submissions of both sides.

The Tribunal referred to its previous stance that in cases where the original adjudicating authority did not provide the option, the appellate authorities could do so. This position was supported by the Hon'ble Gujarat High Court in the case of CCE Ahmedabad vs. M/s. Akash Fashion Prints Pvt. Limited. The Tribunal also cited a similar decision by the Hon'ble Delhi High Court in the case of K.P. Pouches (P) Ltd. Vs. UOI. Based on the consistent stand taken by the Tribunal and the support from higher courts, the appeal by the Revenue was deemed to lack merit and was rejected.

In conclusion, the judgment clarifies that the appellate authorities have the power to provide the option of paying a percentage of duty towards penalties even if the original adjudicating authority did not do so. This decision is supported by previous Tribunal rulings and has been upheld by the Hon'ble Gujarat High Court and the Hon'ble Delhi High Court in relevant cases.