COMMISSIONER OF CENTRAL EXCISE Vs. NATRAJ INDUSTRIES

JUDGEMENT

(1.) It appears that the search was conducted on 11 -6 -2003. Immediately thereafter, on 16 -6 -2003 the respondent deposited a sum of Rs. 5,74,541/ -. A show cause notice dated 9 -12 -2003 came to be issued by the appellant to the respondent in respect of the amount of Rs. 4,21,874/ -. In adjudication proceedings, Assistant Commissioner confirmed the demand of duty at Rs. 4,21,874/ -. It is apparent that keeping in view the provisions of law, a penalty of equal amount was imposed. However, since duty had already been paid of Rs. 5,74,541/ -, by virtue of 4th proviso of Sec. 11 AC of the Central Excise Act, 1944 (in short the Act) 25 percent penalty calculated at Rs. 1,05,468/ - was due and payable from the respondents. It will immediately be seen that as against the duty deposited on 16 -6 -2003 of Rs. 5,74,541/ - as per order of the Assistant Commissioner a total sum of Rs. 5,27,342/ - (i.e. Rs. 4,21,874 + Rs. 1,05,468) was recoverable from the respondents towards duty as well as penalty. Adjudication order was challenged by the assessee/respondent in the course of which duty was reduced from Rs. 4,21,874/ - to Rs. 3,62,881/ -. On the application of the aforementioned Sec. 11 AC of the Central Excise Act, 1944 only 25% of the duty was recoverable, i.e., Rs. 90,720/ -. It appears inexplicable to us how the Commissioner (Appeals) had arrived at the figure of Rs. 2,17,908/ - which ought to have been one fourth (25%) of the duty levied on the respondent especially when the department had accepted the order -in -original.

(2.) It appears that the respondent had then approached the CESTAT which allowed the appeal by reducing the penalty amounting to Rs. 50,000/ -. Learned counsel for the respondent submits that even if the excess tax is ignored a sum of Rs. 1,20,940/ - is lying in excess in the coffers of the appellant. The decision has been taken by the respondent not to seek the recovery of this amount. We, therefore, are not called upon to examine the question of law raised in the present appeal vis -a -vis the scope of CESTAT's power under Sec. 11AC of the Act, in view of the stand of the respondent that it does not seek any refund of the amount lying with the department in terms of the impugned judgment. Since, the excess amount has not been claimed by the respondent, no other orders are called for. The appeal is partly allowed only with respect to the quantum of penalty, i.e., the appellant is entitled to retain the excess amount lying with it. The appeal is disposed of in the aforesaid terms.