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Judgment
This application u/s 35H of the Central Excise Act, 1944, is filed by the Union of India seeking direction to Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as ''the CEGAT'') to refer the question of law as set out in para No. 8 of form No. E.A. 6 under Rule 8 for the opinion of this Court.
The fact giving rise to the application are that respondent M/s. Suncity Synthetics Limited is engaged in manufacture of plastic chips. On 19-12-1997 the Revenue Authorities visited the premises of the factory and found that 3713 Kgs. of final product was short as compared to their statutory record. Thus, duty was imposed amounting to Rs. 55,695/-. A penalty was also imposed of the equal amount in accordance with provisions of Section 11AC of the Central Excise Act, 1944. The Tribunal impressed with the contention that the shortage was found because of calculation error and reduced the penalty to the sum of Rs.15,000/-.
It is contended by Mr. Vijay Aggarwal learned counsel appearing for appellant that the CEGAT has no power to reduce the penalty as imposed by the authority u/s 11AC of the Central Excise Act, 1944. It is submitted that the CEGAT has no discretion to reduce the amount of penalty. On the other hand, it is argued by Mr. Manoj Bhandari, learned counsel appearing for the respondent that provisions are directory in nature. Me has placed reliance on the decision of the Apex Court in State of Madhya Pradesh and others Vs. Bharat Heavy Electricals, The said decision is not directly on the point, but it provides certain guidelines. There is no decision of any High Court or the Supreme Court on the point. In view of this, a authorities pronouncement is required by the jurisdictional court, to settle the controversy raised.
In view of this, we are satisfied that a referable question of law arises from the order of the Tribunal.
Consequently, we allow the application and direct the Customs Excise and Gold (Control) Appellate Tribunal to refer following question for the opinion of this Court:
"Whether the Tribunal has any discretion to reduce the amount of penalty u/s 11AC of the Central Excise Act, 1944 ?"
Let copy of the order be sent to the CEGAT.