2017 (11) TMI 1461 - AT - Central Excise

Benefit of reduced penalty - Whether, appellant herein is to be extended the benefit of discharge of 25% of the amount of duty confirmed, as penalty under the provisions of section 11 AC of Central Excise Act 1944 or otherwise? Held that - the entire amount of ₹ 67,46,191/- was deposited before the appellant was informed about the crystallization of the duty liability of 42,77,334/- by a letter dated 02/09/14 - If these facts are not denied and remain undisputed, the appellant needs to be extended the benefit of discharge of penalty of 25% of the amount of duty crystallized against them. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is entitled to the benefit of discharge of 25% of the duty confirmed as penalty under section 11 AC of the Central Excise Act 1944.

Analysis:
The appeal was filed against order-in-appeal No.278/CE/DLH/2016 dated 15/12/1016. The main issue before the tribunal was whether the appellant should be granted the benefit of discharging 25% of the duty confirmed as penalty under section 11 AC of the Central Excise Act 1944. The case involved a show-cause notice for demand of duty, interest, and penalties, with the demands confirmed along with penalties by the First Appellate Authority. The appellant argued that they had deposited a significant amount during the litigation, covering all liabilities, and thus should be granted the benefit of the 25% duty liability discharge under section 11 AC. Both lower authorities had ruled against the appellant, leading to the appeal.

Upon reviewing the arguments and records, the tribunal found merit in the appellant's case regarding the discharge of only 25% of the duty confirmed as penalty. It was noted that the appellant had informed the authorities about depositing an amount exceeding the duty liability before being officially informed about the crystallization of the duty liability. The Assistant Commissioner confirmed the deposit in a letter, acknowledging the amount deposited by the appellant. As these facts were undisputed, the tribunal concluded that the appellant should be extended the benefit of discharging 25% of the duty liability against them.

In the final decision, the tribunal allowed the appeal to the extent that the lower authority was directed to refund the excess amount held by the revenue, after calculating the total liability (duty, interest, 25% duty as penalty, and penalties on directors) and adjusting it against the deposited amount. The appeal was disposed of with consequential relief, providing clarity on the benefit of discharging the duty penalty under section 11 AC of the Central Excise Act 1944.