COMMISSIONER OF CENTRAL EXCISE Vs. POPULAR FOUNDERS

JUDGEMENT

(1.) THIS appeal filed by the department is for enhancement of penalty. In adjudication of a show -cause notice, the original authority had imposed a penalty of Rs. 3,19,939/- equal to duty on the assessee under Rule 25(a) of the Central Excise Rules, 2002. The first appellate authority reduced the quantum of penalty to Rs. 1.00 lakh after observing that the penalty prescribed under Section 11AC was the maximum limit and that the appellate authority had discretion to impose a lesser penalty. In the present appeal, the department contends that, where the ingredients of Section 11AC are established, the maximum penalty prescribed thereunder should be imposed inasmuch as the penalty under Section 11AC is mandatory. In this connection, the appellant has cited a line of judicial authorities. In the written submissions styled as "cross objections" filed by the respondent, it is submitted that the imposition of penalty under Section 11AC is dependent on determination of duty under Section 11A(2) and such determination of duty is, in turn, dependent on issuance of show -cause notice. However, today, there is no representation for the party despite notice, nor any request of theirs for adjournment.

(2.) LEARNED JDR has argued in support of the grounds of this appeal and has relied on UOI v. Dharmendra Textile Processors : 2008 (231) ELT 3 (SC), wherein the Hon'ble Supreme Court held that, where the conditions prescribed under Section 11AC for a penalty thereunder are satisfied, there was no discretion for quasi-judicial authorities to impose a lesser amount of penalty than prescribed under the provision of law.

(3.) IN the result, the impugned order of the lower appellate authority is set aside insofar as the penalty under Section 11AC is concerned. The appeal is allowed.