LAWS(CE)-2009-11-90

COMMISSIONER OF CENTRAL EXCISE Vs. AJANTA PHARMA LTD.

Decided On November 09, 2009
COMMISSIONER OF CENTRAL EXCISE Appellant
V/S
Ajanta Pharma Ltd. Respondents

JUDGEMENT

(1.) THIS appeal filed by the Revenue is for enhancement of the quantum of penalty under Section 11AC of the Central Excise Act. There is no representation for the respondent despite notice, nor any request for adjournment. However, written submissions styled as "Cross Objections" are available on record. I have examined the records and heard the learned SDR.

(2.) IN a show -cause notice dated 18.7.07, the department demanded differential duty of Rs. 2,06,156/ - (including education cess) for the period from 25.4.2005 to 31.8.2006 from the respondent by invoking the proviso to Section 11A(1) of the Act on the ground of 'undervaluation of the goods with intent to evade payment of duty.' That notice also proposed to recover interest on duty under Section 11AB of the Act, as also to impose penalty on the assessee under Section 11AC of the Act. These proposals were contested. In adjudication of the dispute, the original authority confirmed the above demand of duty against the assessee and appropriated an earlier payment of theirs towards such demand. It also imposed equal amount of penalty on the assessee under Section 11AC of the Act. In an appeal filed by the assessee, the Commissioner (Appeals) reduced the quantum of penalty to Rs. 25,000/ -, while sustaining the rest of the order of adjudication. In the present appeal, the department submits that the amount of penalty equal to duty, imposed by the original authority, is not liable to be reduced under Section 11AC of the Act, inasmuch as such penalty is mandatory once the ground therefore is established. In this connection, the appellant has relied on a plethora of decisions in support of this appeal. The learned SDR submits that the issue is no longer res integra inasmuch as the mandatory character of Section 11AC penalty has been underlined in Union of India v. Dharmendra Textile Processors : 2008 (231) ELT 3 (SC). The learned SDR has also claimed support from the decision of the Supreme Court in Union of India v. Rajasthan Spinning & Weaving Mills : 2009 (238) ELT 3 (SC).