2002 (11) TMI 146 - AT - Central Excise

Summary

Issues involved: Appeal against imposition of mandatory penalty under Section 11AC of Central Excise Act, 1944 and reduction of penalty under Rule 173Q of Central Excise Rules.

Summary:
The appeal and cross-appeal arose from an Order-in-Appeal where the assessee contested the imposition of a mandatory penalty under Section 11AC. The Commissioner accepted the assessee's plea that there was no intention to evade payment of duty as it had been paid before the show cause notice was issued. The Revenue argued that the penalty was imposable due to suppression of facts and intention to evade duty. The Commissioner's order was based on a Tribunal ruling in a similar case. The cross-appeal focused on the reduction of penalty under Rule 173Q, which the original authority had not imposed. Both parties presented their arguments, with the Revenue seeking to set aside the Commissioner's decision on the mandatory penalty and the assessee requesting the reduction of penalty under Rule 173Q to be set aside.

The Revenue contended that the mandatory penalty was imposable due to admitted offense of clearing goods beyond the exemption limit, establishing suppression and intention to evade duty. The assessee argued that the Commissioner's decision was in line with a Tribunal ruling and that there was an error in assuming penalty under Rule 173Q was imposed. The Tribunal rejected the Revenue's appeal regarding the mandatory penalty, citing precedents where duty payment before the show cause notice negated the penalty. However, the Tribunal found merit in the assessee's cross-appeal, noting the error in assuming penalty under Rule 173Q was imposed and subsequently reducing it.

In conclusion, the Tribunal rejected the Revenue's appeal regarding the mandatory penalty but allowed the assessee's cross-appeal by setting aside the penalty under Rule 173Q. Both appeals were disposed of accordingly.