1 mgj IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Central Excise Appeal No.133 of 2005 The Commissioner of ) Central Excise, Mumbai-V ) 5th floor, Utpad Shulk ) Bhavan, Plot No.C-24, ) Sector-E, Bandra Kurla ) Complex, Bandra (E) ) Mumbai 400 051 ) ..Appellant vs. M/s Gan Pharmaceuticals ) Pvt.Ltd., 46-CD, Govt. ) Industrial Estate,Charkop ) Kandivli(W),Mumbai-400067 ) ..Respondent Mrs.S.I.Shah for appellant None for respondent. CORAM: V.C.DAGA AND K.K.TATED JJ 6th May,2010 J U D G M E N T :(Per V.C.DAGA J.) 1 Perused petition. 2 Heard the learned Counsel for the Revenue. None for the respondent in spite of service. 3 This appeal was admitted by order 2 dated 18th January, 2006 to consider the following substantial question of law. a. Whether the mandatory penalty imposable u/s 11AC can b e waived if the assessee has paid duty and interest before the issue of show cause notice but after the clandestine the removal of goods has been detected by the Department? b. Whether the CESTAT has any jurisdiction to reduce/waive the mandatory penalty u/s 11AC in the c ase of clandestine removal of goods resulting in evasion of Central Excise duty? 4 During the course of hearing Ms. Shah sought to place reliance on the judgment of the Apex Court in the case of Union of India Vs. Dharamendra Textile Processors 2008(231) E.L.T.3 (S.C.) wherein section 11AC of the Central Excise Act, 1944 was directly in question as also the judgment in the case of State of Maharashtra 3 Vs. Bharat Heavy Electricals Ltd. 1998 (99) E.L.T.33(SC). The Apex Court after considering the provisions of the Act and the case law was pleased to observe in Dharmendra Textile Case quoted hereinbelow. 12.....Most of cases relied upon by learned Counsel for the assessee had their foundation on Bharat Heavy Electrical s case (supra). As noted above, the same is based on concession and in any event did not indicate the correct position of law. 5 The Supreme Court also noted in Section 11AC of the Act, there is no scope for any discretion. In other words, once the authority comes to conclusion that the penalty is leviable then the penalty has to be in terms of the provisions and there is no discretion to reduce the amount of penalty. 6 Considering the above, the order of 4 CESTAT is set aside and the order of Assessing Officer is restored. In the light of that, question is answered in the negative in favour of the Revenue and against the assessee. 7 The Appeal stands disposed off. No order as to costs. (K.K.TATED J.) (V.C.DAGA J.) 5