2011 (5) TMI 731 - HC - Central Excise

Whether Tribunal has committed substantial error of law in giving option to the respondent to deposit duty, interest and @25% of duty amount towards penalty, within 30 days from the receipt of the order of the Tribunal for availing benefit of reduced penalty under proviso to section 11AC of the Central Excise Act, 1944 Held that - section 11AC of the Central Excise Act permits option to the assessee, the ratio laid down in M/s. Akash Fashion Prints Private Limited (2009 - TMI - 33022 - GUJARAT HIGH COURT) is also applicable in the present appeal, no question of law arising in this appeal, appeal is dismissed

Summary

Issues:
1. Whether the Tribunal erred in giving the respondent an option to deposit duty, interest, and penalty for availing reduced penalty under section 11AC of the Central Excise Act, 1944?
2. Whether the Tribunal erred in applying decisions without comparative facts analysis for giving the respondent the option of reduced penalty?
3. Whether the impugned order of the Tribunal was passed in accordance with the law?

Issue 1:
The assessee-respondent, engaged in the manufacture of man-made fabric, was found to be evading central excise duty. The adjudicating authority issued a show cause notice levying duty, interest, and penalty. The Order-in-Original confirmed the demand, which was upheld by the Commissioner (Appeals). The CESTAT confirmed the demand of duty, interest, and penalty against the respondent. The Tribunal, following its judgment in a previous case, allowed the respondent to deposit the entire amount of duty, interest, and 25% of the penalty within 30 days for a reduction in penalty. The High Court found no merit in the appeal and dismissed it.

Issue 2:
The Tribunal confirmed the demand of duty against the respondent and imposed a penalty. The Tribunal's decision was based on its previous judgment in a different case. The Department challenged this decision, but the High Court found no infirmity in the Tribunal's order. The High Court noted that the Tribunal's direction was in line with a Division Bench decision in another case, which allowed the assessee to pay reduced penalty if the duty, interest, and penalty were paid within 30 days. As the language of the relevant section permitted an option to the assessee, the High Court upheld the Tribunal's decision and dismissed the appeal.

Issue 3:
The Tribunal's order, which allowed the respondent to avail the benefit of reduced penalty by depositing the required amounts within 30 days, was found to be in accordance with law. The High Court referenced previous judgments and legal provisions to support the Tribunal's decision. Since no error or infirmity was found in the Tribunal's order, the High Court dismissed the appeal, stating that no question of law arose. The appeal was dismissed with no costs awarded.