1. These appeals have arisen before us in the wake of a remand order passed by the Hon’ble High Court of Karnataka on 26/3/2010 in Central Excise Appeal No.43/2007.

2. E/398/2004 is by the Managing Director of the assessee company-the appellant in the other appeal, E/397/2004. The Managing Director’s appeal is against a penalty imposed on him under Rule 209A of the Central Excise Rules 1944. On a perusal of the records, we find that the quantum of penalty imposed on him (Rs. 2,00,000/-) by the adjudicating authority was eventually reduced by this Tribunal vide Final Order Nos. 1398-1399/2006 dated 30/8/2006 in Tilrode Chem (P.) Ltd. v. CCE 2007 (207) ELT 573 (Tri-Bang), to Rs. 50,000/-. The challenge in Appeal No.E/398/2004 is against this penalty of Rs. 50,000/-

3. In so far as the assessee’s appeal No. E/397/2004 is concerned, we find that the legal proceedings have chequered history. There has been a long and serpentine course of litigation commencing from a show-cause notice issued to the assessee on 2/8/2002. By order-in-original No.5/03, dated 31/3/2003, which was passed in adjudication of that show-cause notice, the Commissioner of Central Excise dropped demand of duty of Rs. 33,54,334/- based on 67 invoices and confirmed demand of duty of Rs. 24,55,273/- based on 51 invoices. Aggrieved by this major demand of Rs. 24,55,273/- and the penalties associated therewith, the assessee preferred appeals to this Tribunal, which were disposed of by a remand order dated 8/7/2003 confirming once again the above demand based on 51 invoices and imposing penalties. These penalties included penalty equal to duty imposed on the assessee under Section 11AC of the Central Excise Act. Aggrieved by the Commissioner’s order, dated 31/12/2003, the company and its Managing Director once again approached this Tribunal and this bench passed Final order dated 30/8/2006 Tilrode Chem (P.) Ltd. (supra) remanding the question relating to demand of duty of Rs. 24,55,273/-, to the original authority and confirming the rest of the demands of duty totaling to Rs. 20,19,980/-. This bench, however, reduced the quanta of penalties corresponding to the various demands of duty so confirmed, as shown below:

Pursuant to the remand ordered by the Tribunal by Final order dated 30/8/2006 in relation to the demand of duty of Rs. 24,55,273/-, the Commissioner confirmed the demand against the assessee albeit in a different manner and also imposed penalty. Against the said order-in-original, the assessee filed Appeal No.E/565/2007 before this Tribunal and the Tribunal vide Final Order dt.16/6/2010 disposed of the appeal by reducing the quantum of penalty of Rs. 2,00,000/- and setting aside the entire demand of duty. Against our Final Order dated 16/6/2010, the department approached the Hon’ble High Court. We are told that the Hon’ble High Court’s judgment dismissing the appeal of the department is presently under challenge before the Hon’ble Supreme Court. Reverting to our Final Order dated 30/8/2006, we find that the department challenged it also before the Hon’ble High Court. That challenge was against the reduction of penalties under Section 11AC. The Hon’ble High Court allowed that appeal (CEA No.43/2007) by way of remand as per judgment dated 26/3/2010. The judgment of the Hon’ble High Court reads as follows:

"The appeal is by the defendant challenging the legality and correctness of the orders passed by the CESTAT, Bangalore, in Appeal No.E/397 & 398/2004 dated 30.8.2006. The appeal was admitted to consider the following substantial questions of law:

(i)Whether the tribunal is legal and correct in reducing the penalties imposed under Section 11AC of Central Excise Act, 1944 and Rule 57AH of Central Excise Rules, 1944 w