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TMI Blog2010 (10) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT - 27 OF 2005 - - - Dated:- 29-10-2010 - MR. JUSTICE A.K. SIKRI, MR. JUSTICE SURESH KAIT,JJ. Through Mr. Satish Kumar, Sr. Standing Counsel with Mr. Antrik Sarkar, Advocate Through Mr. Shekhar Vyas, Advocate A.K. SIKRI,J. (ORAL) 1. The Revenue has filed this appeal against the orders of Customs, Excise Service Tax Appellate Tribunal dated 30th August, 2004 which was passed in the appeal preferred by the respondent herein. This appeal was admitted on the following substantial question of law:- "Whether a penalty imposed u/s 11 AC can be less than the amount of duty determined to be payable u/s 11 92) of the Central Excise Act, 1944?" 2. The question has arisen in the following factual background. M/s Haldiram Marke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able branded goods with intention to evade Central Excise Duty. The respondent had no obtained the Central Excise registration under Rule 174 of erstwhile Central Excise Rule, 1944 for the manufacture of said excisable goods. They had also cleared these goods without issuance of proper Central Excise invoices and without maintaining proper Central Excise records. As such it was considered that they appeared tohave contravened the provisions of erstwhile Rules, 9,52 (A), 53, 273(G) 174 of Central Excise Rules, 1944. 5. Notification No. 8/2000-CE and 9/2000-CE both dated 1.3.2000 envisaged that the exemption contained in these notifications shall not apply to specified goods bearing a brand name or trade name (whether registered or not0 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Rule 173 Q of the Central Excise Rules, 1944. He had also imposed personal penalty of ₹ 10,000/- of Sh. M.L. Aggarwal, Director of the respondent. 8. Aggrieved by the orders of the adjudicating authority, the respondent had filed an appeal before the Commissioner, Central Excise (appeals). The Ld. Commissioner (appeals) vide her Order-in-Appeal No. 03-CE/20/04 dated 20.01.2004 had upheld the order of the adjudicating authority. The Ld. Commissioner (A) had however ordered that the duty proposed to be demanded shall have to be abated from the cum duty price actually received and liable to be received as a consideration for sale of goods and directed the jurisdictional Assistant Commissioner to re-quantify the duty demand. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rea is not an essential ingredient thereunder. The operative portion of the judgment delineating the aforesaid principle is extracted below:- "26.In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. 27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (supra) has analysed the legal position in the correct p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or contravention of any provisions of this Act or the Rules made there under with the intent to evade payment of duty, had also to be satisfied. The court thus held that once these conditions are satisfied, the penalty as prescribed under Section 11AC of the Act had to be imposed and in that event there was no discretion with the authority to impose lesser penalty than what is prescribed in the aforesaid provision. 12. Having regard to this law laid down by the Supreme Court in the aforesaid two judgments, we answer the question in the negative i.e. the penalty imposed under Section 11AC of the Act cannot be less than the amount determined to be payable under Section 11A (2) of the Central Excise Act, 1944 as Section 11AC laid down in s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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