1 mpt IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO.125 of 2005 Commissioner of Central Excise Mumbai V .. Appellant versus M/s. Guru Plastics Work .. Respondent ... Ms.S.I. Shah with Mr.Suresh Kumar for the appellant. None for the respondents. CORAM : F. I. REBELLO AND D.G. KARNIK, JJ DATED : 29th September 2009 P.C:- 1. A learned Bench of this Court on 13 st January 2006 had framed the following questions for consideration. (i) Whether on the facts and in the circumstances of the case the Hon’ble CESTAT is justified in setting aside the order of imposing penalty having regard to the mandatory language of Section 11 AC of the Central Excise Act, 1944, as amended which state that penalty shall be imposed equal to the amount of duty? 2 (ii) Whether under Section 11 AC of the Central Excise Act, 1944, as amended, the Hon’ble Tribunal has discretion to reduce or to set aside penalty and whether such discretion is not in excess of jurisdiction vested in the Hon’ble Tribunal? “Whether the CESTAT is not justified in setting aside penalty u/s 11 AC holding that it is not invocable while remanding the matter back to the adjudicating authority for redetermination of the valuation and interest u/s.11AB without remanding back the issue of penalty imposable? 2. From the facts and record, we find that the learned Tribunal had recorded the finding that the issue of classification in the case was an issue and in these circumstances, the imposition of penalty was not called for. The matter was thereafter remitted back to the Commissioner to re-determine the valuation as per the formulae in the case of M/s/.Ujagar Prints Vs. Union of India – 1989 (39) ELT 493 (SC). 3. It is this order which was the subject matter of the appeal before us. The law insofar as section 11 AC has been settled in the judgment of the Supreme Court in Dharmendra Textiles, 2008 (231) E.L.T 3 3 (SC) and explained in Rajasthan Spinning & Weaving Mills Ltd 2009 (238) ELT 3(SC) has laid down that Revenue has to prove the predicates of section 11 AC, one of which is that the non payment of duty was with an intent to evade payment of duty. In the instant case, there is a clear finding of fact that there was a vexed issue of classification. 4. In our opinion, therefore, considering the above, there is no merit in the questions as framed ans consequently, appeal is dismissed. (D.G. KARNIK, J) (F.I. REBELLO, J)