Judgment:
S.S. Kang
Heard the learned AR as none appeared on behalf of the respondent.
2. The Revenue filed this appeal against the impugned order passed by the Commissioner of Central Excise whereby a demand of Rs.29,17,879/- is confirmed by invoking the extended period of limitation and penalty under Section 11AC of the Central Excise Act is also imposed. The Commissioner of Central Excise passed the following order:-
“i) The duty of Rs.29,17,879/- (Rupees Twenty Nine lakh Seventeen thousand Eight hundred Seventy Nine only) as demanded in the Show Cause Notice is confirmed and is recoverable from the Assessee under the provisions of Section 11A of Central Excise Act, 1944. However, since the Assessee have already paid Rs.13,69,790/-, I order to appropriate the same against demand confirmed and order for recovery of the balance amount of Rs.15,48,089/- under the provision of Section 11A of the Central Excise Act, 1944 which should be paid forthwith.
ii) I also order for recovery of appropriate interest under the provisions of Section 11AB of the Central Excise Act, 1944.
iii) Mandatory penalty of Rs.18,90,536/- (Rs.15,48,089/- + 25% of 13,69,790 i.e. Rs.3,42,447/-) is imposed under provisions of Section 11AC of Central Excise Act, 1944 which should be paid henceforth.
iv) Penalty of Rs.50,000/- only is imposed under Rule 173Q, 9(2), 52A and 226 of the erstwhile Central Excise Rules, 1944 read with Section 38A of the Central Excise Act, 1944 by taking a lenient view as the defaulter is a State Government Department.”
3. The Revenue is challenging the above mentioned order in respect of the quantity of the penalty imposed under Section 11A of the Central Excise Act, whereby the Commissioner of Central Excise imposed a penalty equal to 25% of the amount already deposited and appropriated.
4. The contention of the Revenue is that the penalty under Section 11AC should be equal to the demand confirmed and the adjudicating authority has no discretion to impose lesser amount of penalty than the demand confirmed. Therefore, the impugned order whereby a penalty equal to 25% of the amount already appropriated, is not sustainable.
5. We find that the amount of Rs.13,69,790/- is already paid prior to the adjudication order and the amount is appropriated in the adjudication order. The provisions of Section 11AC of the Central Excise Act provide the equal amount of penalty in case the demand is confirmed by invoking the reasons of fraud or wilful misstatement. The provisions of Section 11AC also provide that in case the duty determined along with interest is paid within 30 days of the date of communication of the order, an amount of penalty liable to be paid by such persons shall be 25% of the duty so determined. In the present case, as the amount of duty of Rs.13,69,790/- is already paid, and appropriated by the adjudicating authority, therefore we find no infirmity in the impugned order whereby the Commissioner has imposed a penalty of 25% of the duty, which is already paid. The appeal filed by the Revenue is dismissed.