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PJ/Case Laws/2011-12/1160

Reduction of penalty by Tribunal exercising discretionary powers - reasons to be given

Case:  Commissioner of C. Ex. & Customs, Daman v/s Abbasbhai N Shaikh
 
Citation: 2011(267) ELT 54 (Guj.)
 
Issue:- Reduction of personal penalty imposed on Directors of Company by the Tribunal – The Tribunal should give reasons for such reduction while exercising their discretionary powers. 

Brief Facts:- The Lower Authority imposed personal penalty of Rs. 4 lakh each on the 2 Directors of the assessee-company. The Tribunal reduced the personal penalty imposed on the Directors of the Company from Rs. 4 Lakhs to Rs. 1 Lakh each. The Revenue filed appeal before the High Court against order of Tribunal.

Appellants Contention:- Revenue submitted that such interference was made by the Tribunal without giving any reason. It was also submitted that even after exercise of discretionary power, the Tribunal ought to have given cogent reasons for substituting penalty imposed by the authorities below.

Respondents Contention:- Respondent submitted that the Tribunal has exercised discretionary powers. No substantial question of law, therefore, arises.
 
Reasoning of Judgment:-The High Court found that the Tribunal had in exercise of discretionary powers reduced the penalty observing that keeping in view overall facts and circumstances of the case, penalty is reduced.
 
The High Court further observed that more elaborate reasons would have enabled the Court to appreciate Tribunal’s satisfaction for exercising discretionary powers. The High Court held that simply stating that in facts and circumstances of the case, deduction is warranted in a given case would not be sufficient even in exercise of discretionary powers to reduce penalty. However, in facts of the present case, the High Court did not propose to interfere on the ground that firstly, amount involved is not very large and secondly, the substantial portion of duty was paid even before the issuance of show cause notice. This being mitigating circumstance, in facts of the present case we allow the issue to rest at the stage of Tribunal.
 
Decision:- Appeal dismissed. 

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