COMMISSIONER OF CENTRAL EXCISE Vs. ROYAL CREATION
LAWS(BOM)-2010-3-304
HIGH COURT OF BOMBAY
Decided on March 08,2010

COMMISSIONER OF CENTRAL EXCISE Appellant
VERSUS
Royal Creation Respondents




JUDGEMENT

- (1.)Heard the learned Counsel appearing for the Revenue and the learned Counsel appearing for the Respondent.
(2.)This appeal was admitted by an order dated 19-7-2007 to consider the following substantial question of law:
Whether in the facts and circumstances of the case, the Tribunal is right in reducing the mandatory penalty Under Section 11AC of the Central Excise Act, 1944

(3.)The factual matrix reveals that the show cause notice was issued against the Respondent-Assessee which was confirmed by an order-in-original 13-3-2003. The said order-in-original was subject matter of challenge before the Commissioner (Appeals). The Commissioner (Appeals) vide its order dated 30-6-2003 applied the provisions of Section 11AC of the Central Excise Act, 1944 considering the facts and circumstances of the case and went on to reduce penalty under Section 11AC. The said order was subject matter of challenge, not at the instance of the Respondent-Assessee but at the instance of the Appellant/Revenue, before the Tribunal. In other words, the order of Commissioner (Appeals) was accepted by the Respondent and that order has become final and conclusive against the Respondent to that extent. The Revenue before the Tribunal contended that the penalty could not have been reduced by the Commissioner (Appeals) under Section 11AC. The said contention was rejected by the Tribunal holding that there was no deliberate intention to evade excise duty because the unit was under the bona fide impression that they were not required to pay excise duty. This finding was recorded by the Tribunal only to sustain reduction in penalty under Section 11AC of the Central Excise Act, 1944.


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