- (1.) This appeal has been preferred for decision of substantial questions of law proposed in para 4 of the memo of appeal as under: (a) Whether CESTAT was correct in reducing the penalty amount which was imposed as an equivalent amount of duty under Section 11AC of the Central Excise Act, 1944? (b) Whether without reducing the duty amount and without legal sanctity of any rule or section CESTAT is empowered to reduce the penalty amount, imposed by the adjudicating authority?
(2.) Relevant facts are that the assessee is engaged in the manufacture of "Pulsator". They received item "Bush" from M/s. Electrolux Voltas Limited. While determining assessable value of the product "Pulsator", they did not include value of "Bush". On this account, demand of duty of Rs. 73,042/- with equal amount of penalty under Section 11AC of the Central Excise Act, 1944 (for short, 'the Act') and of Rs. 10,000/- under Rule 173Q of the Central Excise Rules (for short, 'the Rules') was confirmed by the adjudicating authority. The Commissioner (Appeals) affirmed the finding of the adjudicating authority for inclusion of value of "Bush" into the value of "Pulsator" for determining assessable value. However, the demand of duty was set aside on the ground of limitation.
(3.) The Tribunal set aside the finding of the Commissioner (Appeals) and held that the demand was within limitation as extended period of limitation raising the duty demand was rightly invoked. While confirming the duty demand, penalty was reduced to Rs. 10,000/-;