In the High Court of Judicature at Madras Dated : 28.06.2010 Coram : THE HON'BLE MR.JUSTICE F.M.IBRAHIM KALIFULLA and THE HON'BLE MR.JUSTICE M.M.SUNDRESH Civil Miscellaneous Appeal No.1244 of 2010 The Commissioner of Central Excise Chennai-I Commissionerate 26/1 (Old No.121) M.G.Road Chennai 600 034. .. Appellant/Respondent vs. M/s.Bhagwandas Metals Ltd. 117, Sadayan Kuppam Village Road Manali, Chennai 600 103. .. Respondent/Applicant Civil Miscellaneous Appeal filed under Section 35G of the Central Excise Act 1944, against the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Chennai in Final Order No.1610/2009 dated 06.11.2009. For Appellant : Mr.S.Arunkumar, CGSC --- J U D G M E N T (Judgment of the Court was delivered by F.M.IBRAHIM KALIFULLA,J.) The Commissioner of Central Excise is the appellant. Challenge is to the order of the Tribunal dated 06.11.2009 passed in Final Order No.1610 of 2009. The only issue is relating to the deletion of penalty. The appellant seeks to raise the following substantial question of law: "Whether on the facts and circumstances of the case, the Hon'ble Appellate Tribunal was right in concluding that no penalty was imposable, when the Hon'ble Supreme Court has held that no discretion is available on the quantum of penalty under Section 11AC of the Central Excise Act, in the decision in Union of India vs. M/s.Dharamendra Textile Processors (2008 [231] CLT 3 (SC)?" https://hcservices.ecourts.gov.in/hcservices/ 2. We heard Mr.Arunkumar, learned Standing Counsel for the appellant. 3. The Tribunal while examining the order of the Original Authority, namely, the Commissioner of Central Excise dated 31.10.2003, has noted that in respect of the respondent's Induction Furnace Unit, the duty leviable for the period from 1.9.1997 to 31.03.2000 was Rs.6,43,732/-, but actually payable was only Rs.1,43,752/-. The Tribunal has rendered a finding of fact that apart from the payment of Rs.4,35,484/- on 30.03.1998, another sum of Rs.5,00,000/- was paid on 08.11.1997, out of the total amount of Rs.10,79,236/-. It therefore held that the balance amount of Rs.1,43,752/- alone was payable for the above said period. The Original Authority apart from determining the difference duty at Rs.6,43,752/-, also imposed a penalty of Rs.10,79,236/-. While dealing with the penalty imposed by the Original Authority, the Tribunal has noted that in respect of the re-rolling mills, the respondent had paid the duty in excess than what was payable. The statement with reference to the said payment as noted by the Original Authority was as under: Duty payable on ACP indicated Duty already paid in Col.4 @ Rs.300/ MT Rs.12,38,331/- Rs.24,04,001/- Rs.12,38,331/- Rs.12,83,964/- Rs. 3,91,680/- Rs. 7,83,360/- Rs. 3,91,680/- Rs. 5,22,240/- 4. In fact, the Original Authority himself has rendered a finding that the respondent had paid duty in excess than what was payable and therefore, they were not liable to pay any further duty on re-rolling mills and accordingly, dropped the entire demand of duty of Rs.71,23,219/- in respect of re-rolling mills as claimed in the show cause notice. 5. Having regard to the said conclusion that excess duty paid by the respondent in respect of its re-rolling mills, the Tribunal apparently felt that there was no mens rea in the conduct of the respondent in discharging the payment of duty under the provision of the Central Excise Act, in order to attract invocation of Section 11AC of the Central Excise Act and consequently, held that no penalty can be imposed. 6. In this context, it will be worthwhile to refer to the recent decision of the Hon'ble Supreme Court in Union of India vs. Rajasthan Spinning and Weaving Mills reported in 2009 (238) ELT 3 (SC), wherein the Hon'be Supreme Court while making a specific reference to the decision in Union of India vs. M/s.Dharamendra Textile Processors (cited supra), held as under: https://hcservices.ecourts.gov.in/hcservices/ "23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub- section (2) of Section 11A. That is what Dharamendra Textile decides. 24. It must, however, be made clear that what is stated above in regard to the decision in Dharamendra Textile is only in so far as Section 11AC is concerned. We make no observations (as a matter of fact there is no occasion for it) with regard to the several other statutory provisions that came up for consideration in that decision." 7. When the decision in Union of India vs. M/s.Dharamendra Textile Processors having thus been read by the Hon'ble Supreme Court itself in the subsequent decision in Union of India vs. Rajasthan Spinning and Weaving Mills (2009 (238) ELT 3) and applying the said ratio, we find that the conclusion of the Tribunal in having held that there was no scope to invoke Section 11AC of the Act, in order to levy a further penalty on the respondent cannot be found fault with. In fact, the decision in Rajasthan Spinning and Weaving Mills has been subsequently followed by the Hon'ble Supreme Court in SKF India Pvt. Ltd. vs. Commissioner of Central Excise, reported in 239 ELT 385. 8. Having regard to the law laid down by the Hon'ble Supreme Court in the above recent decisions, the order impugned in this appeal cannot be found fault with. We, therefore, do not find any merit in the question of law raised in this appeal. The appeal, therefore, fails and the same is dismissed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ ATR To 1. Customs, Excise and Service Tax Appellate Tribunal South Zonal Bench, Chennai. 2. Commissioner of Central Excise Chennai – I Commissionerate 26/1 (Old No.121), M.G.Road Chennai 600 034. 1 cc To Mr.S.Arunkumar, Advocate, SR.46362 C.M.A.No.1244 of 2010 vd(co) sra 14/07/2010 https://hcservices.ecourts.gov.in/hcservices/