CEC No.11 of 2002 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CEC No.11 of 2002 Date of decision: 27.9.2010 Commissioner of Central Excise Delhi III, New Delhi -----Petitioner Vs. M/s Haryana Acrylic Co. (P) Limited and another ----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Sanjiv Kaushik, Standing Counsel for the revenue. None for the respondents. Adarsh Kumar Goel,J. 1. This petition has been filed under section 35H(1) of the Central Excise Act, 1944 (for short, ‘the Act’) for direction to refer for opinion of this Court following question of law:- “Whether CEGAT was right in reducing the penalty imposed under section 11AC of the Act, which otherwise is mandatory and should be equal to the amount of duty short levied and confirmed?” 2. The respondent-assessee was alleged to have illegally availed MODVAT credit on inputs and to have clandestinely removed goods resulting in evasion of duty. On the basis of facts found during visit of the officers of the department to the factory premises of the assessee, show cause notice was issued and the adjudicating authority passed ‘order in original’ creating demand of duty and also levied penalty. On further appeal to the Tribunal, though the demand was upheld and so were the findings of 1 CEC No.11 of 2002 clandestine removal and wrongful availment of MODVAT credit, the amount of penalty was reduced. 3. We have heard learned counsel for the petitioner. None appears for the assessee. 4. Learned counsel for the petitioner points out that in view of judgment of the Hon’ble Supreme Court in Union of India v. Rajasthan Spinning and Weaving Mills, 2009(238) ELT 3 and plain language of Section 11AC of the Act, penalty equal to the amount of duty evaded is mandatory and this question clearly arises from the finding recorded by the Tribunal. 5. We find merit in the submission. However, instead of directing the Tribunal to draw up a statement of case and make a reference to this Court, we take the question to have been referred and answer the same in favour of the revenue and against the assessee. Since the effect of judgment relied upon and mandate of the statutory provision has not been gone into by the Tribunal, the order of the Tribunal will require re-consideration. The matter will, thus, stand remanded to the Tribunal for decision in accordance with law. 6. The petition is disposed of. (Adarsh Kumar Goel) Judge September 27, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 2