1 IN HE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO. 106 OF 2006 WITH CENTAL EXCISE APPEAL NO. 196 OF 2007 WITH CENTRAL EXCISE APPEAL NO. 197 OF 2007 The Commissioner of Central Excise, Thane-II. ... Appellant Vs. M/s. Visen Fabrics ... Respondents Mr. P.S.Jetly with Mrs. S.V.Bharucha,Advocates, for the appellant (in all the matters) Mr.Jitu Motwani with Mr. Jas Sanghavi, i/b. PDS Legal, Advocates, for the respondents (in all the matters). CORAM: F.I.REBELLO AND J.H.BHATIA, JJ. DATE : 14th July, 2009. 2 P.C. 1. Central Excise Appeal No.197 of 2007 was on board. However, it was brought to our attention by the learned Counsel for the Revenue that two other appeals, being Central Excise Appeal Nos.196 of 2007 and 106 of 2006 which are inter-related are required to be disposed of together. We find that service was not effected in Central Excise Appeal No.106 of 2006 and Central Excise Appeal No.196 of 2007. Learned Counsel appearing for the respondents in Central Excise Appeal No.197 of 2007 informs that he has no instructions to appear in the two other matters earlier referred. 2. However, as the issue arises from the same order, in our opinion, as appearances are put up om behalf of the appellant in Central Excise Appeal No.197 of 2007, all the three Appeals can be disposed of by a common order. 3. An order came to be passed on 29.9.2001, whereby penalty of rs. 4.50 lakh was imposed on the respondent under Rule 96ZQ(ii) of the Central Excise Rules, 1944. Against that order, the assessee preferred an appeal before the Commissioner (Appeals) which came to be disposed of on 27.10.2003. The Commissioner (Appeals), for reasons set out in the order, was pleased to reduce the penalty from Rs.4.50 lakh to Rs.3 lakh. The 3 Revenue aggrieved by the said order, preferred an appeal before the learned Tribunal which, by its order dated 14.9.2005 was pleased to dismiss the appeal preferred by the Revenue. Against that order, the Revenue referred an appeal to this Court which was numbered as Central Excise Appeal No.106 of 2006 which was admitted on 19.7.2006 and the following question was framed :- “Whether the expression “penalty” equal to an amount of duty outstanding from him or Rs.5000/- whichever is greater occurring in clause (ii) of sub-rule 5 of Rule 96ZQ of the erstwhile Central Excise Rules, 1944, is in the nature of mandatory penalty.” 4. It appears that the asessee had also preferred an appeal agaist the order of the Commissioner (Appeals). The assessee also preferred an appeal before the CEGAT which by order dated 24.3.2004 was pleased to set aside the order of the Commissioner (Appeals) and remanded the matter back to the Commissioner. 5. On remand, the Commissioner (Appeals) by order dated 27.4.2005 was pleased to partly allow the appeal preferred by the assessee and reduced penalty from Rs.4.50 lakh to Rs.2.25 lakh. 4 6. Both the assessee and the appellant were aggrieved by the order of the CEGAT in two different appeals, appeal by Revenue was numbered as Appeal No.E/2500/05 which was disposed of by order dated 11.8.2006. The learned Tribunal was pleased to dismiss the appeal preferred by the Revenue. 7. The assessee’s appeal was numbered as Appeal No.E/2594/2005- Mum and which by order dated 27.9.2006 was partly allowed inasmuch as a total penalty of Rs.5,000/- was only imposed against Rs.4.50 lakh by the Assessing Officer and Rs.2.25 lakh by the Commissioner (Appeals). 8. Appeal by the Revenue against the order dated 11.8.2006 before this Court is numbered as Central Excise Appeal No.197/2007 and appeal by the Revenue against the order dated 27.6.2006 is numbered as Central Excise Appeal No.196 of 2007. 9. Having set out the facts and the various orders, to our mind, i view of the subsequent orders, the order in Central Excise Appeal No.106 of 2006 will have to be set aside. 5 10. Central Excise Appeal No.196 of 2007 and Central Excise Appeal No.197 of 2007 will have to be heard together. As pointed out earlier, the same Tribunal first disposed of Revenue appeal by order dated 11.2.2006 by holding that the penalty could not be said to be illegal. After having so held in the appeal preferred by the assessee, it reduced the penalty from Rs. 2.25 lakh to Rs.5,000/-. In our opinion, therefore, both these orders will have to be set aside. 11. Then the question is whether the matter is to be sent back for reconsideration. In our opinion, insofar as Section 11AC is concerned, the Judgment of the Supreme Court in Union of India vs. Dharamendra Textile Processors, 2008 (231) ELT 3 (SC), has taken the view that penalty is mandatory and penalty has to be co-extensive with the duty which was imposed. Insofar as penalty under Rule 96ZQ is concerned, the Supreme Court in Union of India vs. Krishna Processors, 2009 (237) ELT 641 (SC) has taken the view that penalty is mandatory and also co-extensive with the amount of duty. 12. In the light of that,in our opinion, no useful purpose will be served by remanding the matter. In the instant case, the duty imposed is of 6 Rs.4.50 lakh. The penalty imposable would be Rs.4.50 lakh. The orders therefore of the first and second appellate authorities are set aside and the original order is restored. Appeals disposed of accordingly. (J.H.BHATIA,J.) (F.I.REBELLO,J.)