2014 (2) TMI 214

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..... addition to the interest liability. In such circumstances, levy of minimum penalty cannot be held to be mandatory. Element of discretion is certainly available to be exercised on the principle of proportionality. The penalty has to be commensurate to the circumstances of default. Reduction of penalty to 1,00,000/- cannot be held to be arbitrary or perverse - Decided against Revenue.
A K Goal And A K Rath, JJ. For the Appellant : Mrs. Mrunalini Padhi, Sr. Standing Counsel (Central Excise& Customs) For the Respondent : S C Lal, S Lal, & Sujit Lal JUDGEMENT:- PER : A K Goel, CJ. 1. This appeal has been preferred under Section 35G of the Central Excise Act, 1944 proposing following questions of law: "1. Whether on the facts and circum .....

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..... ad applied for re-determination of the ACP, which was still pending. 3. The Deputy Commissioner, Central Excise & Customs, Cuttack, by his order dated 29.3.2002, after issuing show cause, confirmed the demand of the duty with interest and imposed penalty equal to the amount outstanding. 4. On appeal, the duty amount as well as the corresponding penalty were reduced, accepting the plea of the assessee that there was error in calculation to that extent. On further appeal, the Tribunal reduced the penalty amount while upholding the order of the appellate authority with regard to the duty and also reduced the interest by directing the same to be calculated from the date of the order of the Supreme Court in M/s. Union of India V. Supreme Steel .....

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..... ay be calculated and recovered accordingly. 12. Coming to the issue of penalty, learned counsel for the Revenue submits that in view of decision of the Apex Court in Union of India v. Dharamendra Textiles Processors, 2008 (231) E.L.T. 3 (S.C.), lesser penalty is not imposable and no discretion is available on the quantum of penalty under Section 11AC of Central Excise of the Central Excise Act, 1944. 13. Learned counsel for the assessee on the other hand submits that the judgment in Dharamendra Textiles Processors (supra) has been explained in the subsequent judgments of the Supreme Court in Union of India v. Rajasthan Spinning & Weaving Mills, 2009 (238) E.L.T. 3 (SC). The decision in the Dharamendra Textiles Processors (supra) cannot be .....

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