Per S.L. Peeran :

The appeal by the revenue and a cross appeal by the assessee both arises from the Order in Appeal No. 61/2002 dt. 27/03/02. Before the Commissioner the only question raised by the assessee was with regard to the imposition by the mandatory penalty of Rs. 6,56,636/- under Section 11AC of Central Excise Act'1944. The Order in Original had dropped the penal proceedings initiated under other provisions of the C.E. Act Rules. Against the dropping of penal proceedings under Rule 173Q, the revenue had not filed any appeal before the Commissioner. The Commissioner in the impugned order accepted the assessee's plea that there was no intention to evade payment of duty and the duty had been paid on 16.05.2001 much before the date of issue of Show Cause Notice dt. 25.05.2001. While setting aside the mandatory penalty under Section 11AC of the Act, and interest claimed under Section 11AB of the Act, he followed the Tribunal's ruling rendered in the case of Amritsar Crown Caps (P) Ltd. reported in 2001 (46) RLT 169 (CEGAT)=2002 (140) ELT 437 (T). However, inadvertently, he noted that the penalty imposed under Rule 173Q was only a nominal penalty and hence he took a lenien