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TMI Blog2014 (5) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... ent should be adjusted towards the amount due and after deduction, no duty is payable or no interest is payable, the question of imposing penalty would not arise at all. Penalty is leviable only for non payment of duty and interest and in terms of the orders of assessment. If the excess paid amount is taken into account, adjusted towards the duty, the question of imposing penalty would also not arise. - matter remanded to the Tribunal for fresh consideration - Decided in favor of assessee. - CEA No. 57 of 2012 - - - Dated:- 6-12-2013 - N. KUMAR AND MRS. RATHNAKALA, JJ. Sri. G. Shivadass, Adv. for the Appellant Sri. K.N. Mohan, Adv. for the Respondent JUDGMENT N. Kumar, J. This appeal is preferred by the assessee challenging the order passed by the Tribunal, which has declined to consider the request of appellant for the benefit of reduced payment of penalty in terms of the Proviso to Section 11AC of the Central Excise Act, 1944. 2. The facts are not in dispute. The assesee is a private limited company, undertaking the manufacturing activity on job work basis for M/s. Pfizer Limited. They are also manufacturing and selling the said formulations to M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Union of India v. Dharamendra Textiles Processors [2008] 231 ELT 3 (SC). After such remand the Tribunal heard the parties and dismissed the appeal. The Tribunal was of the view that the contentions of the assessee, i.e., entitlement of the benefit of reduced penalty as provided in the proviso of Section 11AC is untenable as the High Court has directed the Tribunal to decide the case in accordance with law and as per the judgment of the Supreme Court in Dharamendra's Textiles Processors (supra) case, where it is held that the penalty payable is equal to the duty and there is no discretion left to the authority to reduce the penalty. Aggrieved by the said order, the present appeal is filed. 3. Learned Counsel for the appellant assailing the impugned order contends that the case of the assessee before the Tribunal was not that they are liable to pay only 25% of the penalty. Their case was, in view of the judgment of the Apex Court in the case of Dharamendra Textiles Processors (supra), when once the condition in the proviso to Section 11AC of the Central Excise Act is fulfilled, the authority has no jurisdiction to reduce the penalty which is equal to the duty payable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein considering the proviso, it has held as under: 7. A perusal of Section 11AC of the Act shows that an amount equal to the amount of duty as determined by the Central Excise Officer under Section 11A(2) of the Act is required to be paid by the assessee where any duty of excise has not been (a) levied or paid or (b) has been short paid or (c) erroneously refunded by the reason of fraud collusion or any wilful misstatement or suppression of facts or (d) contravention of any of the provisions of this Act or the Rules made thereunder with intent to evade payment of duty. The aforesaid principal clause has four provisos. The first two provisos postulate a concessional rate of penalty in case the amount of duty as determined under sub section 11A(2) of the Act and the interest payable thereon under Section 11AB of the Act stand paid within thirty days? from the date of communication of the order of the officer determining such duty. In such a case the amount of penalty has been stipulated to be 25% of the duty so determined. 8. The second proviso further imposes an obligation that the benefits contemplated by first proviso are to be available if the amount of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or short-levied or short-paid or erroneously refunded as referred to in sub-section (5) of section 11A, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay a penalty equal to fifty per cent of the duty so determined; (c) where any duty as determined under sub-section (10) of section 11A and the interest payable thereon under section 11AA in respect of transactions referred to in clause (b) is paid within thirty days of the date of communication of order of the Central Excise Officer who has determined such duty, the amount of penalty liable to be paid by such person shall be twenty-five per cent of the duty so determined; (d) where the appellate authority or tribunal or court modifies the amount of duty of excise determined by the Central Excise Officer under sub-section (10) of section 11A, then, the amount of penalties and interest payable shall stand modified accordingly and after taking into account the amount of duty of excise so modified, the person who is liable to pay duty as determined under sub-section (10) of section 11A shall also be liable to pay such amount of penalty or interest so modified. Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder. Therefore, the Tribunal was not justified in declining to go into the said question on the ground that the Apex Court has prohibited the authority from going into said question. Therefore, the order requires to interfered with. Similarly, if the assessee has paid excess payment, the excess payment should be adjusted towards the amount due and after deduction, no duty is payable or no interest is payable, the question of imposing penalty would not arise at all. Penalty is leviable only for non payment of duty and interest and in terms of the orders of assessment. If the excess paid amount is taken into account, adjusted towards the duty, the question of imposing penalty would also not arise. That factor also should be gone into by the authority and appropriate orders should be passed on the basis of the materials available on record. In that view of the matter, the order passed by the Tribunal is contrary' to law and is liable to be set aside. Accordingly, we pass the following order: ORDER a. The appeal is allowed. b. The impugned order is set aside. c. The substantial questions of law framed are answered in the favour of the assessee and against the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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