In Brief
The respondent, a railway equipment manufacturer, was found to have manufactured copper coils for captive use without paying duty or submitting required declarations. The adjudicating authority imposed a penalty of Rs.2,06,000/-. The Tribunal partially upheld the duty demand but reduced the penalty to Rs.50,000/-. The Supreme Court held that under Section 11-AC of the Central Excise Act, 1944, the levy of penalty is mandatory with no discretion to reduce its quantum once made out. The Tribunal acted without legal authority in reducing the penalty amount. The appeal was allowed, the Tribunal's order set aside, and the adjudicating authority's original penalty order was restored."
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