2014 (3) TMI 129 - HC - Central Excise

Penalty u/s 11AC - Whether in the facts and circumstances of the case and in law, the Tribunal is justified in reducing the penalty imposed under Section 11AC of the Act having regard to the mandatory language of Section 11AC of the Act - Held that - Tribunal has upheld a finding of fact of the authorities below that there was an intention on the part of the assessee to evade payment of duty on due date. Thus, equivalent penalty under Section 11AC of the Act was warranted. However, purporting to exercise its discretion, the Tribunal has by the impugned order reduced the penalty - However, in the present facts and circumstances of the case there is no need of remand as authorities under the Act have already given a finding of fact that there was an intention to evade the duty on the part of the Respondent-Assessee - Decided in favour of Revenue.

Summary

Issues:
Reduction of penalty under Section 11AC of the Act by the Tribunal.

Analysis:
The High Court heard an appeal filed by the Revenue challenging the order of the Customs, Excise and Service Tax Appellate Tribunal. The main question raised was whether the Tribunal was justified in reducing the penalty imposed under Section 11AC of the Act, considering the mandatory language of the said section. The Court noted that the appeal was ordered to be heard along with another case involving a similar legal question. The Court referred to a previous order where a similar matter was remanded to the Tribunal for de-novo disposal in light of Supreme Court judgments. The Court emphasized that the Tribunal had upheld the finding of the authorities that there was an intention to evade payment of duty, justifying the equivalent penalty under Section 11AC. However, the Tribunal had reduced the penalty amount purportedly at its discretion.

The Court further observed that in the present case, there was no need for remand as the authorities had already found the intention to evade duty. Citing the Supreme Court decision in Rajasthan Spinning and Weaving Mills, the Court emphasized that the adjudicating authority has no discretion to impose a lesser penalty than the tax demanded under the proviso to Section 11A of the Act. Therefore, the Court allowed the appeal, set aside the Tribunal's order, and reinstated the penalty imposed by the adjudicating authority and confirmed by the Commissioner of Central Excise (Appeals). The Court concluded by allowing the appeal with no order as to costs.