In Brief
A company manufacturing railway parts modified old smoothing reactors by adding new copper coils but failed to pay duty on the copper coils used in this captive consumption activity or to submit required declarations. The adjudicating authority imposed a penalty of Rs.2,06,000/-. The Tribunal reduced it to Rs.50,000/-. The Supreme Court held that under Section 11-AC of the Central Excise Act, 1944, penalty is mandatory with no discretion to reduce the quantum once a case for penalty is made out. The Court set aside the Tribunal's order and restored the full penalty amount.
The lawyer headnote and full judgment text are available to registered users.