2017 (12) TMI 1244 - AT - Central Excise

Penalty u/s 11AC - penalty not taking part in adjudication by adjudicating authority - Held that - neither any discussion was made by the Commissioner on this issue nor any decision was given in the impugned order therefore issue of penalty has not been adjudicated by the adjudicating authority. In this scenario matter needs to be remanded to the adjudicating authority for passing a fresh order on the issue of penalty proposed u/s 11AC read with Rule 25 of Central Excise (No.1) Rules, 2001/Central Excise Rules, 2002 and Rule 173Q of the erstwhile Central Excise Rules, 1944 - appeal allowed by way of remand.

Summary

Issues:
Imposition of penalty under Section 11AC based on confirmed demand of ?72,29,467.

Analysis:
The appeal was filed by the Revenue against the Order-in-Original passed by the Commissioner of Central Excise, seeking the imposition of a penalty under Section 11AC corresponding to a confirmed demand of ?72,29,467. The Revenue argued that although the show cause notice proposed a penalty under Section 11AC, the Commissioner did not provide a decision on the penalty in the impugned order, making it improper. On the other hand, the respondent's counsel contended that in a previous appeal before the Tribunal, it was held that there was no suppression on the part of the respondent, and thus the extended period was not applicable, which should also apply to the issue of penalty.

Upon careful consideration, the Tribunal noted that while the show cause notice proposed a penalty under Section 11AC, the Commissioner did not discuss or decide on this issue in the impugned order. Therefore, the matter was deemed not adjudicated by the adjudicating authority. The Tribunal ordered a remand to the adjudicating authority for a fresh decision on the penalty proposed under Section 11AC, directing them to consider the previous CESTAT Order. Consequently, the impugned order was set aside, and the appeal was disposed of by remanding it to the adjudicating authority solely to decide on the penalty under Section 11AC corresponding to the confirmed demand of ?72,29,467.

The decision was pronounced in court on 21/11/17.