CCE Vs. KALINDI ISPAT PVT. LTD.

JUDGEMENT

(1.) REVENUE filed this appeal against order of the Commissioner (Appeals). Learned D.R. on behalf of the Revenue submits that the original authority confirmed the demand of duty of Rs. 4,50,546/ - and appropriated the amount as deposited by them and also imposed penalty of equal amount under Section 11AC of Central Excise Act, 1944. He submits that the Commissioner (Appeals) reduced the penalty to 25% of the amount of duty under first proviso to Section 11AC of the Act. He further submits that the respondents did not exercise the option under the provision of Section 11AC after receipt of order of the original authority and, therefore, Commissioner (Appeals) cannot reduce the penalty.

(2.) LEARNED Advocate relied upon the decision of the Hon'ble Delhi High Court in the case of K.P. Pouches (P) Ltd. v. UOI reported in : 2008 (228) ELT 31 (Del.).

(3.) FIRST proviso to Section 11AC provides that where duty has been determined under Sub -section (2) of Section 11A and the interest payable thereon under Section 11A is paid within 30 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 person under this Section shall be 25% of the duty so determined. In the present case, the respondents deposited the entire amount of duty immediately upon detection which was duly appropriated by the adjudicating authority. Even then, imposition of penalty of equal amount of duty without giving option to the respondents in terms of first proviso to Section 11AC, of the Act is not justified. I find that the Commissioner (Appeals) had given the option in terms of first proviso to Section 11AC of the Act and the learned Counsel submits that they have already deposited the penalty as per order of the Commissioner (Appeals). The identical issue is decided by the Hon'ble Delhi High Court in the case of K.P. Pouches (P) Ltd. v. UOI reported in : 2008 (228) ELT 31 (Del.) in favour of the assessee.