CEA No.55 of 2007 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.E.A.No.55 of 2007 (O&M) Date of decision: 27.9.2010 Commissioner of Central Excise Commissionerate, Delhi III, Gurgaon -----Appellant Vs. M/s YKK India Pvt. Limited, Rewari ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Gurpreet Singh, Senior Standing Counsel for the revenue. Mr. Vinod Aggarwal, Advocate with Mr. Rohit Khanna, Advocate for the respondent. Adarsh Kumar Goel,J. 1. The revenue has preferred this appeal under Section 35G of the Central Excise Act, 1944 (for short, ‘the Act’) against order dated 23.8.2006 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, proposing to raise following substantial question of law:- “Whether the penalty under Section 11AC of Central Excise Act, 1944 read with Rule 173Q of erstwhile Central Excise Rules, 1944 is mandatory and equal to the duty demanded or the authority has discretion to impose lesser penalty?” 2. Show Cause Notice under section 11AC of the Act was issued to the respondent assessee alleging evasion of duty and after adjudication, demand of duty was raised and penalty was levied which 1 CEA No.55 of 2007 was upheld on appeal. However, the Tribunal set aside the levy of penalty following its own judgment in CCE Gurgaon v. Machino Montel (I) Limited, 2004(168) ELT 466. 3. It is not disputed that the view taken by the Tribunal in above judgment was reversed by this Court in CEA No.24 of 2007 (Commissioner of Central Excise, Ludhiana v. M/s Sham Udyog Limited Ludhiana Road, Malerkotla), decided on 24.9.2010. It was held that if requisite mens rea existed, penalty provided under Section 11AC of the Act was mandatory. 4. In view of above, this appeal is allowed. The impugned order of the Tribunal is set aside and the matter is remanded to the Tribunal for fresh decision in accordance with law. The parties may appear before the Tribunal for further proceedings on 20.12.2010. 5. The appeal is disposed of. (Adarsh Kumar Goel) Judge September 27, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 2