2010 (4) TMI 802 - AT - Central Excise

Applicability Section 11AC of the Central Excise Act - appellants submits that option to pay duty interest and 25% of the duty amount towards penalty within 30 days of the order has not been given by both the lower authorities. Learned DR agrees that such option should have been given to the appellants as per proviso to Section 11AC of Central Excise law - Held that - option extended to the appellants to deposit duty interest and 25% of the duty amount towards penalty within 30 days from receipt of this order. It is made clear that failure to pay either duty or interest in full and 25 % of duty towards penalty within 30 days of receipt of this order appellants shall be liable to pay 100% of duty demand towards penalty.As regards the appeal of the Partner no penalty is imposable on the Partner under Section 11AC and there is no specific direction as regards penalty on Director. Tribunal order passed as regards Director shall remain undisturbed.

Summary

Issues:
1. Challenge to the Tribunal order.
2. Applicability of Section 11AC of the Central Excise Act.
3. Option to pay duty, interest, and penalty.
4. Imposition of penalty on the Partner under Section 11AC.
5. Tribunal order regarding penalty on Director.

Analysis:
1. The Tribunal's order was challenged before the Hon'ble Gujarat High Court, which remanded the matter back to the Tribunal for reconsideration of the applicability of Section 11AC of the Central Excise Act in light of specific judgments. The High Court set aside the Tribunal's orders and directed a fresh consideration based on the judgments of the Apex Court.

2. The learned advocate for the appellants argued that the option to pay duty, interest, and 25% of the duty amount towards penalty within 30 days was not provided by the lower authorities, as mandated by the proviso to Section 11AC of the Central Excise law. The learned DR agreed that such an option should have been given. Citing precedents like the case of Swati Chemicals Industries and the decision of the Hon'ble Gujarat High Court in the case of CCE v. Akash Fashion Prints, the Tribunal extended the option to the appellants to deposit the required amounts within the specified timeframe.

3. Regarding the appeal of the Partner, it was clarified that no penalty is imposable on the Partner under Section 11AC. Since there was no specific direction from the Hon'ble Gujarat High Court regarding penalty on the Director, the Tribunal's order concerning the Director remained unchanged and undisturbed.

This detailed analysis of the judgment highlights the issues raised, the arguments presented, and the Tribunal's decisions based on legal provisions and precedents cited during the proceedings.