CX - Penalty - If both lower authorities had applied their mind, matter would not have travelled so far - as duty & interest was paid before issue of SCN, penalty u/s 11AC is only 25% of duty: CESTAT
By TIOL News Service
MUMBAI, NOV 24, 2014: IN this case, the appellant paid the amount of central excise duty in dispute along with interest before issuance of the show cause notice.
In spite of the above, the adjudicating authority as well as the lower appellate authority confirmed the penalty to the extent of 100% of the duty demanded.
The appellant is, therefore, before the CESTAT and submits that only a penalty of 25% of the duty ought to have been confirmed as per the provisions of s.11AC of the CEA, 1944.
When the AR was asked by the Bench to comment on the issue, he said the Tribunal may take its own view on the subject.
The Bench extracted the provisions of section 11AC of the CEA, 1944 and thereafter observed -
++ As per the proviso to Section 11AC, in case the duty and interest has been paid within 30 days of the adjudication, the penalty is leviable to the extent of 25% only. But instead of following the provisions of the law, both the lower authorities have confirmed the penalty to the extent of 100%, which shows that the order has been passed without application of mind. If both the lower authorities have applied their mind, matter need not have travelled till this Tribunal.
++ The appellant has paid duty along with interest before the issuance of the show cause notice. Therefore, penalty is restricted to 25% of the duty confirmed. The appellant is required to pay 25% of the penalty confirmed against them.
The appeal was allowed in the above terms.
Litigative costs? See 2008-TIOL-240-HC-DEL-CX, F.No. 208/07/2008-CX.6 dated 22.05.2008.
(See 2014-TIOL-2328-CESTAT-MUM)