2017 (6) TMI 940 - AT - Central Excise

Reduction in penalty - suppression of facts - Held that - The Commissioner (A) has taken a very lenient view and reduced the penalty to 1, 20, 000/- only - there is no infirmity in the impugned order reducing the penalty from 6, 75, 535/- to 1, 20, 000/- which the appellant is liable to pay as per the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
Reduction of penalty by Commissioner (A) from ?6,75,535 to ?1,20,000 only.

Analysis:
The appeal was against an order reducing the penalty imposed by the Commissioner (A) from ?6,75,535 to ?1,20,000. The case involved small scale manufacturers of ayurvedic cough syrup selling products without paying Central Excise duty. The appellants remitted duty exceeding the exemption limit without registration or following procedures. The Joint Commissioner confirmed duty demand, interest, and penalty. The appellant appealed, leading to a remand by the Commissioner (A) for re-quantification of duty demand. The appellant contested the extended limitation period and suppression of facts. The Commissioner (A) reduced the penalty to ?1,20,000, prompting the present appeal.

The appellant argued a bona fide reason for non-registration and non-payment of duty, challenging the extended limitation period under Section 11A. It was contended that penalty imposition under Section 11AC alleging suppression was unjustified due to the absence of misrepresentation and the belief that the product was not excisable. Conversely, the AR defended the penalty, alleging fact suppression and justifying the reduced penalty of ?1,20,000 by the Commissioner (A).

After hearing both parties and reviewing the records, the Judicial Member found no fault in the reduced penalty order. The Judicial Member upheld the penalty reduction from ?6,75,535 to ?1,20,000, dismissing the appeal due to lack of merit. The operative part of the order was pronounced on 26/05/2017.