Mgn IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO.4 of 2005 The Commissioner of Central Excise...Appellant Vs. M/s.Unitech Prefeb Ltd. ...Respondent Mr.R.V.Desai, Senior Counsel with Mr. P.S. Jetly and Mr. Gohit Pardeshi, for the Appellant. Mr. R.Chand for the Respondent CORAM : F.I. REBELLO & J.H. BHATIA, JJ. DATED : 23TH JUNE, 2009 ORAL JUDGMENT (PER FERDINO I. REBELLO, J.) 1. In the instant case by the original order, a penalty had been imposed on the respondents herein under Section 11AC read with Rule 173(1) of the Central Excise Rules . Aggrieved the appellants preferred an Appeal before the Commissioner (Appeals). Apart from various other grounds, two grounds which were raised, were, that there was no suppression of fact and as such the extended period of limitation prescribed under Section 11A could not have been invoked. Secondly, no penalty could have been imposed under Rule 173(1) read with Section 11AC as there was no misrepresentation or suppression of fact justifying invocation of Section 11AC read with Rule 173(1). The learned Commissioner (Appeals) was pleased to reduce the penalty under Rule 173Q to Rs.40,000/-. The Revenue aggrieved preferred an appeal to CESTAT which dismissed the appeal on the ground that at the relevant time the law was that it was open to the authority not to impose the maximum penalty. Appeal preferred by Revenue was rejected.It is this order which is the subject matter of the present appeal. 2. The Appeal was admitted on the following question:- “Whether the CESTAT is correct in upholding the order of Commissioner (A), who reduced the mandatory and equal penalty leviable under section11AC read with Section 173Q(1) of the Central Excise Act, 1944 to an amount less than the duty determined under section 11A of the Central Excise Act, 1944.” 3. At the time of hearing learned Counsel for the petitioner relies on the judgment of the Supreme Court in Union of India Vs. Dharmerndra Textile Processors, 2008 (231) E.L.T. 3 (S.C.). From the ratio of the judgment In Dharmerndra Textile Processors (supra) the law now as declared by the Supreme Court is that once the authority comes to the conclusion duty was short paid or not paid or the like the penalty has to be imposed under Section 11AC and there is no discretion to reduce the amount of penalty which has to be equal to the amount of duty. 4. The Supreme Court thereafter in Union of India vs. M/s.Rajasthan Spinning & Weaving Mills, 2009 (238) E.L.T. Page 3 (S.C.) has considered in Dharmerndra Textile Processors (supra) and has held that the various predicates of Section 11AC have to be satisfied whether penalty can be imposed as also the extended period of limitation will have to be considered. 5. In the instant case the respondents had raised these contentions before the Commissioner (Appeals). However, the Commissioner (Appeals) did not answer the same , but reduced the penalty. The Appellant did not challenge the non-finding. The Revenue preferred an Appeal before the CESTAT. CESTAT also did not examine these contentions as it only went on the footing that there was power not to impose penalty. 6. In these circumstances, in our opinion, the ends of justice would be met if the order of Commissioner (Appeals) and CESTAT are set aside and the matter is remanded back to the Tribunal to answer the two grounds as raised by the Appellant under Grounds (h) and (i). 5. We make it clear clear that if the Commissioner (Appeals) comes to the conclusion that penalty can be imposed then considering the judgment in Dharmerndra Textile Processors (supra) there is no discretion to reduce the amount of penalty. With the above observation appeal disposed of. (J.H. BHATIA,J.) (F.I. REBELLO,J.)