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TMI Blog2011 (2) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... oner (Appeals) to interfere in the order relating to imposition and quantification of the penalty by the adjudicating authority. The conduct of the party in relation to default committed is one thing and the discretionary decision of the authority on the basis of appreciation of facts and circumstances is another thing. The impugned order nowhere discloses that the Commissioner (Appeals) having found that the adjudicating authority had ignored the aspect about lack of mala fide on the part of the assessee or that the adjudicating authority had failed to take note of the point regarding the requirement of interpretation of law about the applicability of the provisions of Rule 57D - appeal filed by the assessee fails - impugned order in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 844/- on the ground of wrong availment and utilization of inadmissible modvat credit. The proceedings were contested by the assessee by filing their reply dated 6-3-2000. The adjudicating authority confirmed the demand of Rs. 56,66,844/- and ordered recovery under Rule 57-I of the said Rules and also imposed penalty of Rs. 5 lakhs under Rule 173Q of the said Rules. The assessee aggrieved by the said order filed appeal before the Commissioner (Appeals) which came to be disposed of by the impugned order. 3. When the appeal which was filed before Commissioner (Appeals) came up for hearing, the representative of the assessee appearing before the lower appellate authority submitted proof of deposit of the duty amount confirmed under order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Placing reliance in the decision of the Apex Court in the matter of Zunjarrao Bhikaji Nagarkar v. UOI reported in 1999 (112) E.L.T. 772 and of the Bombay High Court in Asian Paints (India) Ltd. v. UOI reported in 2004 (167) E.L.T. 147, the DR submitted that it was obligatory for the authorities below to impose penalty under Rule 173Q. Once the default of the nature committed in the matter in hand was detected and therefore, the adjudicating authority having in its discretion imposed the penalty of Rs. 5 lakhs, it was not open to the Commissioner (Appeals) to set aside the same on the ground of lack of mala fide or there being a question of interpretation of statutory provisions. On the other hand, the learned Advocate appearing for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to be challenged it was specifically given up in the course of hearing of the appeal before the lower appellate authority and the same has been clearly recorded by the Commissioner (Appeals) in the impugned order. Being so, it is too late for the assessee to make any grievance about confirmation of demand by the adjudicating authority. Besides, once it is clear that the subject matter of dispute before the Commissioner (Appeals) was confined to the issue of penalty only, it is not permissible to raise new issue relating to merits of the case in the appeal arising from the order passed by the Commissioner (Appeals) confining the adjudication to the issue of penalty only. The order passed by the adjudicating authority attained finality ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit and the matter implied interpretation of law for the applicability of the provisions of Rule 57A of the said Rules has totally set aside the said penalty. Apparently, the Commissioner (Appeals) failed to take note of the fact that the imposition of penalty under Rule 173Q was mandatory and the adjudicating authority while complying its obligation under the said statutory provision in exercise of his discretion had quantified the penalty of Rs. 5 lakhs. Being so, without arriving at the finding that the discretion was arbitrarily exercised in relation to quantification of the penalty amount, it was not open to the Commissioner (Appeals) to interfere in the order relating to imposition and quantification of the penalty by the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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