2004 (4) TMI 177 - AT - Central Excise

Summary

Issues:
Challenge to setting aside mandatory penalty under Section 11AC by Commissioner (Appeals).

Analysis:
The appeal before the Appellate Tribunal challenged a part of the order passed by the Commissioner (Appeals) regarding the setting aside of the mandatory penalty under Section 11AC on the firm. The Tribunal noted that the respondents had engaged in clandestine removal of goods, specifically Branded Chewing Tobacco, resulting in a duty liability of Rs. 26,520. The adjudicating authority had confirmed the duty demand and imposed penalties. However, the Commissioner (Appeals) set aside the penalty under Section 11AC, citing lack of mens rea on the part of the respondents. The Tribunal disagreed with this reasoning, emphasizing that the admission of clandestine removal and non-disputed duty liability warranted the imposition of the mandatory penalty. The Tribunal found the Commissioner's decision to be misconceived and erroneous, reinstating the penalty imposed by the adjudicating authority.

The Tribunal rejected the argument that the penalty should be reduced, pointing out that the respondents had not pursued their own appeal against the order and had not filed any cross-objection in the present appeal. As the appeal was filed by the Revenue, no concession in the penalty amount could be granted to the respondents. Therefore, the Tribunal upheld the mandatory penalty imposed by the adjudicating authority and set aside the Commissioner (Appeals)'s decision to quash the penalty under Section 11AC. The Tribunal modified the impugned order of the Commissioner (Appeals) and allowed the appeal of the Revenue, thereby reinstating the penalty on the respondents.