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2016 (7) TMI 890 - AT - Central ExcisePower of commissioner (appeals) to enhance the penalty - the power of the first Appellate Authority in Revenue matter were power of enhancement is also vested in the Appellate Authority the powers are coterminous with the adjudicating authority. In other words what the adjudicating authority can do or could have done can be done by the Id.Commissioner (Appeals). - Accordingly we are not in agreement to the Id. Single Member s observation that no higher penalty could have been imposed by the Id. Commissioner (Appeals) in the appeals filed by the assessee which were both filed heard and disposed of prior to the filing of the appeals by the Revenue. - there is no error in the orders of the Id.Commissioner (Appeals) - Decided against the revenue.
Issues:
1. Imposition of token penalty instead of equal penalty under Rule 96ZP (3) of CER. 2. Appeal by Revenue against the order of Commissioner (Appeals) rejecting the appeal of the respondent-assessee. 3. Conflicting views on the lapse of proceedings under Rule 96ZP(3) post omission of Section 3A. 4. Jurisdiction of the Commissioner (Appeals) to enhance penalty. Issue 1 - Imposition of Token Penalty: The Appeals were filed against the Commissioner (Appeals) order refusing to entertain Revenue's appeals challenging the imposition of token penalty of ?5,000 instead of an equal penalty under Rule 96ZP (3) of CER. The duty amounts not paid by the assesses were detailed, and the Adjudicating Authority confirmed the duty in arrears as recoverable under Section 11A (2) read with Section 11AB of CER. The penalty imposed was ?5,000 in one case and ?10,000 in another under Rule 96ZP (3) of CER read with Section 11AC of the Act. The Revenue contended that the penalty should be enhanced equal to the amount of duty outstanding, as per the provisions. Issue 2 - Appeal by Revenue: The Revenue was aggrieved by the Commissioner (Appeals) observations and the fact that they were not heard before the appellate orders were passed. The Revenue argued that a higher penalty should have been imposed as per the ruling of the Hon'ble Alllahabad High Court. The matter was referred to a Division Bench for deciding whether the decisions on penalty imposition were justified, considering the conflicting views on the lapse of proceedings under Rule 96ZP(3) post omission of Section 3A. Issue 3 - Conflicting Views on Lapse of Proceedings: The conflicting views arose from decisions regarding the lapse of proceedings under Rule 96ZP(3) after the omission of Section 3A. The Division Bench and subsequent decisions indicated that proceedings initiated under Rule 96ZP(3) would automatically lapse post omission of Section 3A. However, the Hon'ble Punjab and Haryana High Court held that the liability of the assessee under Section 3A was not wiped out by its omission, citing the addition of Section 38A in the Act providing saving provisions. Issue 4 - Jurisdiction of Commissioner (Appeals): The Tribunal found that the Commissioner (Appeals) had the power to enhance the quantum of assessment and impose or enhance penalties after giving the assessee an opportunity to be heard. Citing the Supreme Court ruling, the Tribunal concluded that the powers of the Commissioner (Appeals) were coterminous with the adjudicating authority, allowing for the imposition of higher penalties. Consequently, the Tribunal dismissed the Revenue's appeals and disposed of the Cross Objections accordingly.
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