SATYAM CHEMICALS Vs. COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD

JUDGEMENT

(1.) THE present appeal is being decided in terms of Honble Gujarat High Court judgment vide which the matter stands remanded for fresh consideration.

(2.) THE Original Adjudicating Authority vide his order dated 23 -2 -2007 confirmed the demand of duty of Rs. 57,936/ - under Section 11AC of Central Excise Act. By taking note of the fact that the said duty was deposited before issuance of show cause notice, he imposed penalty to the extent of 25% of duty amount i.e. Rs. 14,484/ - under Section 11AC of Central Excise Act, 1944.

(3.) THE said order was appealed against before Commissioner (Appeals). The assessee contended before the appellate authority that 25% of the penalty amount stands paid by them on 9 -3 -2007 i.e. within a period of 30 days from the communication of the order. The Commissioner (Appeals) allowed the Revenues appeal and enhanced the penalty equal to duty amount, by observing as under : - I have carefully read the provision of Section 11AC of the Act, and I observe that these provisions do not empower the adjudicating officer to reduce penalty equal to 25% of the penalty imposable under this Section. However, as per 1st two proviso of Section 11AC, if a person pays duty as determined under the provisions of Section 11A(2) along with interest chargeable under Section 11AB of the Act within 30 days from the date of communication of the order determining such duty, the amount of penalty liable to be paid by such person under this Section shall be 25% of the duty so determined and such benefit of reduced penalty is available only if such reduced penalty is also paid within the above said period of 30 days. In view of the above, I observe that impugned order is incorrect as far as penalty imposed is concerned. The adjudicating officer should have imposed penalty equal to the duty determined and appellant unit was open to avail benefit of above said provisions of law. In view of the foregoing, I allow the appeal and set aside the impugned order in regard to penalty on the respondent firm. Respondent firm is directed to pay penalty equal to the duty evaded i.e. Rs. 57,936/ -.