Commissioner of C. Ex. and Customs vs Abbasbhai N. Shaikh

Akil Kureshi, J.—Revenue is in appeal against order of the Tribunal dated 11-9-2008 (2009 (238) E.L.T. 125 (Tribunal)) to the extent it reduced personal penalty of Director of the Company from Rs. 4 lakh to Rs. 1 lakh each. From the record, we find that authorities below had imposed personal penalty on two Directors of Rs. 4 lakh each. Authorities have also imposed separate penalties on the company. In further appeal, tribunal upheld penalties on the company, however reduced personal penalty to Rs. 1 lakh each.

Counsel for the Revenue vehemently contended that such interference was made without giving any reasons. He submitted that even after exercise of discretionary power, Tribunal ought to have given cogent reasons for substituting penalty imposed by the authorities below.

On the other hand, counsel for the Respondent opposed the appeal submitting that tribunal has exercised discretionary powers. No substantial question of law is therefore, arising.

Having heard learned Counsel for the parties and having perused the orders on record, we find that 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. We are of the view that more elaborate reasons would enable us to appreciate Tribunal''s satisfaction for exercising discretionary powers. We do feel that simply stating that in facts and circumstances of the case, reduction is warranted in a given case would not be sufficient even in exercise of discretionary powers to reduce penalty. However, in facts of the case, we do not propose to interfere. Firstly, amount involved is not very large. Secondly, we are informed that 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.

With above observation, the Tax appeal is dismissed.