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TMI Blog2015 (10) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% of the penalty. - adjudicating order requires the quantification of the penalty to be made in terms of the first and second proviso of Section 11AC of the Act so that an incentive is given to the assessee to pay the duty and interest within the stipulated period in order to avail payment of duty at reduced rate of 25%, failing which, the total amount of penalty becomes payable. This option was not given in the instant case and, therefore, to that extent the order in original imposing penalty is in violation of the first proviso to Section 11AC of the Act. - duty had already been paid before the issuance of show cause notice. The appellant was therefore entitled to pay 25% penalty only. - Decided in favour of assessee. - Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impose a penalty to the duty amount i.e. ₹ 93,112/- upon M/s Chandra Metal Enterprises, E-24, Foundry Nagar, Hathras Road, Agra, under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 for surreptitious removal of the goods in this case. I also confirm the interest demanded under the provisions of Section 11AB Central Excise Act, 1944. From the aforesaid, it is clear that the penalty equal to the duty amount of ₹ 93,112.00 was imposed. It is also clear that the duty had already been deposited prior to the issuance of the show cause notice. We also find that the Superintendent,Central Excise, Agra had issued an order dated 01.08.2013 in which it was indicated that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Delhi High Court judgment in the case of K.P. Pouches (P) Ltd [2008-TIOL-240-HC-DEL-CX]. In para 27 of the order, the High Court has opined that the adjudication authority should explicitly state the option available to the assessee under section 11AC of the Act in its adjudication order. 2. The matter has been examined . The first and second proviso to section 11AC of the Act read as follows; Provided that where such duty as determined under sub-section (2) of section 11A, and the interest payable thereon under section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such persons under this section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period, then penalty was reduced to 25% of the duty. The Board clarified that the said proviso was beneficial not only for the Department but also to the assessee. The Delhi High Court in K.P. Pouches (supra) held that the assessee should be informed of the option in the adjudication order itself. Similarly in Exotic Associates vs. Commissioner of Central Excise, 2010 (252) E.L.T. 49 (Guj.), the Gujrat High Court held that the adjudicating authority in its adjudication order should explicitly set out the options available to the assessee under Section 11AC of the Act and if the assessee thereafter does not take advantage of the first proviso to Section 11AC of the Act, it would be entirely at its own peril. In Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been paid before the issuance of show cause notice. The appellant was therefore entitled to pay 25% penalty only. In the light of the aforesaid, the order in original of the Assessing Authority quantifying the penalty amount to 100% of the duty is incorrect and is not in consonence with the provisions contained in proviso (1) and (2) to Section 11AC of the Act. Since 25% of the penalty had already been paid by the assessee, the order in original passed by the Deputy Commissioiner, Central Excise, Agra is modified to the extent that since the duty had already been deposited prior to the show cause notice, the appellant was only entitled to pay 25% of the duty as penalty. The appeal is allowed. The question of law is answered, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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