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2005 (8) TMI 137 - HC - Central Excise
Issues:
Challenge to reduction of penalty amount by Tribunal under Section 11AC of the Central Excise Act, 1944 and Rule 25 of the Central Excise Rules, 2000. Analysis: The judgment addressed the issue of whether the Tribunal had the authority to reduce a penalty imposed under Section 11AC of the Central Excise Act, 1944. The counsel for the Revenue argued that no discretion was available to reduce the penalty amount, citing Section 11AC and Rule 25 of the Central Excise Rules, 2000. The counsel contended that since Rule 25 mirrored Section 11AC, any discretion under the latter should also apply to the former. However, the Court observed that while Section 11AC did not provide for discretion, Rule 25 did allow for discretion, specifying both higher and lower limits for penalty imposition. Moreover, the counsel for the Revenue referred to a previous Court order related to a pending appeal, arguing that a similar question on the mandatory nature of Section 11AC was being considered. The Court differentiated the issues, stating that the pending appeal concerned Section 11AC, while the current appeal focused on the interpretation of Rule 25. The Court emphasized that Rule 25 did grant discretion to authorities for penalty imposition within the prescribed limits. Additionally, the counsel for the Revenue cited a Supreme Court judgment to support the argument that no discretion existed for penalty imposition. However, the Court clarified that the Supreme Court judgment acknowledged discretion concerning the amount or quantum of penalty, not the levy itself. The Court found that the Tribunal had validly exercised its discretion in reducing the penalty amount, providing reasoned justifications for its decision. Conclusively, the Court dismissed the appeal, stating that no substantial question of law was involved. The appeal was rejected with no costs imposed, affirming the Tribunal's decision to reduce the penalty amount within its discretionary powers under Rule 25 of the Central Excise Rules, 2000.
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