1. As per the facts on record, the respondents are engaged in the manufacture of bright bars falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. In course of the preventive checks, it was found that the respondents had raised debit notes from their client collecting value in excess of the assessable value.
Accordingly, differential demand of duty of Rs. 88,655/- was confirmed against them alongwith confirmation of interest and imposition of personal penalty of identical amount. The Adjudicating officer also refused to issue a certificate endorsement of Rule 57E of the Central Excise Rules for the excess duty paid by the respondents.
2. On an appeal against the above order, the Commissioner (Appeals) held that the penalty imposed under Rule 11AC is excessive and as per the amendment to Section 11AC made by Section 96 of the Finance Act, 2000, it is laid down that penalty of 25% of the duty amount is imposable if the amount of duty is paid by the assessee. Accordingly, he reduced the penalty to 25% of the duty amount. As regards Rule 57E certificate he directed the proper officer to issue the necessary certificate so as to enable to respondent to take the modvat credit of the excess duty paid by him.
3. Revenue is aggrieved by the above order of the Commissioner (Appeals). I have heard Shri Bidhan Chandra, learned L.D.R. for the Revenue and Shri D.D. Gwalani, learned Advocate for the respondents.
4. As regards the personal penalty, I find that it is now settled law that Section 11AC lays down the maximum penalty and the authorities are not bound to impose 100% penalty under the said Section. The Commissioner (Appeals) has taken note of the amendment made in the said section in the Finance Act, 2000 and has rightly observed that inasmuch as the duty has been paid by the respondents, the penalty needs to be reduced. Accordingly, I find no infirmity in the said portion of the impugned order.
5. As regards the issue under Rule 57E, the Revenue's grievance is that the earlier judgments of the Tribunal relied upon by the Appellate Authority are not applicable inasmuch as Sub-rule (3) of Rule 57E was substituted w.e.f. 01/03/1997 by Notification No. 6/97-CE (NT) imposing prohibition on the issue of certificates where amount of duty become recoverable from the suppliers on account of any short levy or non levy by reason of fraud or any willful mis-statement or suppression of facts with intent to evade payment of duty. The earlier C.E.G.A.T. orders pertain to the period prior to 01/03/1997 and as such do not apply to the facts of the instant case. Learned advocate appeared for the responders accepts that the said portion of the Commissioner (Appeals) order is required to be set aside.
6. In view of the above, I set aside the following part of the impugned order Passed by the Commissioner (Appeals):- "However, in so far as Rule 57E is concerned, the decisions of the Tribunal in the citations given by the appellants are sound. It is already decided by the Higher Authority that the certificate in terms of Rule 57E is issuable to the appellants. Thus the proper office is directed to issue the necessary certificate for the amount of Rs. 88,655/-." 7. In view of the foregoing, the appeal filed by the Revenue is partly allowed.