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TMI Blog2009 (6) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty imposed was really without jurisdiction and consequently we set aside the order of the Tribunal, Commissioner (Appeal) and A.O., to the extent of only penalty imposed under Rule 57-I(4). - 168 of 2006 - - - Dated:- 23-6-2009 - <?xml:namespace prefix = st2 /> Ferdino I. Rebello and J.H. Bhatia, JJ. REPRESENTED BY : S/Shri P.S. Jetly with J.B. Mishra, for the Appellant. Shri M.H. Patil, for the Respondent. [Judgment per : Ferdino I. Rebello, J. (Oral)]. - Appeal was admitted on the following question :- "Whether the mandatory penalty imposable under Rule 57-I(4) can be reduced by the Hon'ble CESTAT?" 2. A few facts may be set out :- A show cause notice was issued to the petitioner company for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, collusion or suppression of facts, or contravention of any of the provisions of the Act or the rules made thereunder with intent to evade payable of duty, the person who is liable to pay the amount equivalent to the credit disallowed as determined under clause (iii) of sub-rule (1) shall also be liable to pay a penalty equal to the credit so disallowed. Explanation I. Where the credit disallowed is reduced by the Commissioner of Central Excise (Appeals), the Appellate Tribunal or, as the case may be, a court of law, the penalty shall be payable on such reduced amount of credit disallowed. Explanation II. Where the credit disallowed is increased or further increased by the Commissioner of Central Excise (Appeals), the Appellate Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of penalty could never have been proportionate to what defence is available and/or that the mandatory penalty of 100% can be reduced depending upon the reasons given. 5. The issue, however, cannot rest there. Subsequent to the judgment in Dharmendra Textile Processors (Supra) it appears that the Union of India's contention was in all such cases that penalty has to be mandatory. The issue again came up for consideration before the Supreme Court in Union of India v. M/s. Rajasthan Spinning Weaving Mills, 2009 (238) E.L.T. 3 (S.C). The Hon'ble Supreme Court set out the ratio in Dharamendra Textile Processors (supra). Having so done it was set out that before penalty can be imposed, it was incumbent that the A.O., must record a finding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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