CESTAT is correct in allowing benefit of penalty upto 25% of duty amount

The argument of the Revenue that the judgement in Dharmendra Textile Processor’s case (supra) would apply and penalty equal to the amount of duty of excise assessed by the Assessing Authority is to be paid. We are afraid that such an argument would not be available because judgement in Dharmendra Textile Processor’s case (supra) dealt with Section 11 AC of the Act and has concluded the mandatory nature of the penalty contemplated by the proviso . In para 26, reference has been made to the Union Budget of 1996-97, when Section 11 AC of the Act was introduced. It was then clarified t...