(Per : HONOURABLE MR.JUSTICE AKIL KURESHI) Department is in appeal against the judgment of the Tribunal dated 30th September 2009. There is a checkered history to this litigation. The Department has issued a show cause notice against the respondent-manufacturer and also against responsible officers for personal penalty. The Adjudicating Authority passed order in original and confirmed the duty demand of Rs.2.90 lacs and also imposed penalty of Rs.73,000/- on the respondent and personal penalties on the Directors of the Company.
Respondent as well as the Department, both preferred separate appeals before the Commissioner. The Commissioner dismissed the respondent's appeal, however, with respect to Department's appeal, the same was allowed in part and enhanced penalty from Rs.73,000 to 100% of the duty demand confirmed i.e. Rs.2.90 lacs.
Respondent preferred two separate appeals before the Tribunal. The first appeal preferred pertained to the rejection of its appeal by the Commissioner. In essence, therefore, in such an appeal, the respondent had questioned the Commissioner's order confirming the principal duty demand of Rs.2.90 lacs and penalty of Rs.73,000/-. This appeal came to be dismissed by the Tribunal by the order dated 15.12.2008. The Tribunal confirmed the duty demand and also refused to reduce the penalty observing that the same is imposed at the rate of about 25% and therefore no further litigation is justified. The respondent's subsequent appeal was directed against the Commissioner's order enhancing penalty from Rs.73,000/- to Rs.2.90 lacs. The said appeal was decided by the Tribunal by the impugned order dated 30.9.2009. The Tribunal was of the opinion that the Commissioner's order having merged with the Tribunal's appellate order dated 15.12.08 and such order having become final, the respondent's appeal against enhancement of penalty by the Commissioner must be allowed.
Having heard the learned counsel for the parties, though we are not fully convinced by the reasoning adopted by the Tribunal for allowing the respondent's appeal by the impugned order, in so far as the ultimate result is concerned, we do not see any reason to make any change. Essentially, we do not think that the Commissioner's subsequent order enhancing the penalty could be stated to have merged with the Tribunal's order dated 15.12.2008. Such order of the Tribunal was confined to the legality of the Commissioner's order rejecting the respondent's appeal confirming the principal duty demand and penalty of Rs.73,000/-. When subsequently, the Commissioner enhanced the penalty by allowing the Department's appeal, the respondent's further appeal before the Tribunal on such issue had to be decided on merits. Ordinarily we would have also examined such issues in the present appeal. However, it is not in dispute that the respondent had paid the entire duty demand before issuance of show cause notice and further penalty imposed by the Adjudicating Authority came to be approximately 25 per cent of the duty confirmed. In that view of the matter, counsel for the Revenue was unable to dispute the respondent's contention that in any case, facility of paying 25 per cent of the penalty could still be available to the respondent in terms of the provisions contained in section 11AC of the Central Excise Act. Under the circumstances, we see no reason to entertain this appeal. Tax Appeal is dismissed.
(Akil Kureshi J.) (Ms.Sonia Gokani, J.) (vjn) Top