COMMISSIONER OF CENTRAL EXCISE, HYDERABAD Vs. MOHD. SOHAIL

JUDGEMENT

(1.) BOTH Revenue and the party are aggrieved with the O -I -A No. 30/2001 C.E., dated 19 -9 -2001 passed by the Commissioner (Appeals), Hyderabad. The Commissioner (Appeals) has noted that the demand of interest under Section 11AB of CE Act is not sustainable as the Section came into force on 28 -9 -1996 and does not have retrospective effect. He has followed the Tribunal ruling rendered in the case of Marcandy Prasad Radhakrishna Prasad Pvt. Ltd. v. Commissioner - 1998 (102) E.L.T. 705 (T) wherein it has been held that the provisions of Section 11AC and Section 11AB, being of substantive character cannot be applied for the period earlier to 28 -9 -1996. The Civil Appeal filed by the Department against the said decision of the Tribunal has been dismissed by the Honble Supreme Court as reported in 1999 (107) E.L.T. A121.

(2.) WE have heard learned JDR and the learned Counsel in the matter and find that the Commissioners order in setting aside the demand of interest under Section 11AB is in terms of the judgment cited by him which has been confirmed by the Apex Court. We do not find any merit in the Revenue appeal and the same is rejected.

(3.) INSOFAR as the partys appeal is concerned, it is against the enhancement of penalty by the Commissioner (Appeals) from Rs. 50,000/ - to Rs. 1,25,000/ -. The appellants contend that the penalty cannot be enhanced suo motu without notice to the appellants and adjudication on this point. In this regard, the Counsel relies on the judgment of the Tribunal in the case of Shriram Vinyl and Chemical Industries v. CCE, Jaipur - 2003 (151) E.L.T. 409 (Tri. - Del.) wherein the Tribunal has held that Commissioner (Appeals) cannot enhance the penalty without due notice and without adjudication on this point and without appeal from the Revenue. The penalty has been set aside. We have considered the plea and find that this case law clearly applies to the facts and circumstances of the case. The Commissioner (Appeals) could not have enhanced the penalty without due process of law and hence the same is not sustainable. Such an order enhancing the penalty is set aside by following the ratio of the judgment cited by the Counsel. The Partys appeal is allowed with consequential relief if any.