CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL HYDERABAD REGIONAL BENCH - COURT NO. – I Customs Appeal No. 21561 of 2014 (Arising out of Order-in-Original (denovo) No.33/2013 (C.EX) (COMMR) dated 29.11.2013 passed by Commissioner of Central Excise, Customs & Service Tax, Tirupati)

Pr. Commissioner of Customs .. APPELLANT (Preventive)Tirupati - CGST

9/86 A, Behind West Church Compound, Amaravathi Nagar, M.R.Palli, Andhra Pradesh – 517 502.

VERSUS M/s Lord’s Securities Mint Ltd., .. RESPONDENT

100%EOU, IDA, Gajulamandyam, Renigunta Road, Tirupati, Andhra Pradesh -517 502.

APPEARANCE:

Shri A. Rangadham, Authorized Representatives for the Appellant.

None for the Respondent.

CORAM: HON’BLE Mr. A.K. JYOTISHI, MEMBER (TECHNICAL)

HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)

FINAL ORDER No. A/30006/2026 Date of Hearing: 01.08.2025 Date of Decision: 09.01.2026 [ORDER PER: A.K. JYOTISHI]

Department has come in appeal against the Order-in-Original dated

29.11.2013, which has been passed by the Adjudicating Authority in denovo proceedings and wherein demand of customs duty and central excise duty amounts were confirmed and already paid was also appropriated along with penalty under Section 112(ii) of Customs Act 1962 and under Rule 25(b) of Central Excise Rules 2002 (impugned order). The Adjudicating Authority also gave an option to the respondent under proviso to Section 114A of Customs Act 1962 and Section 11AC(c) to pay 25% of the amounts of duty so confirmed towards penalty, apart from the applicable interest within 30 days from the date of communication of this order.

2. The case of the Department is that the Adjudicating Authority has wrongly allowed the option to pay reduced penalty of 25% of the amount in terms of Section 114A of Customs Act and Section 11AC(c) of Central Excise Act as the penalty was imposed under Section 112 of Customs Act and Rule 25 of the Central Excise Rules, for which the provisions of Section 114A and Section 11AC are not applicable and therefore to the extent, giving them the option is not as per law. The Department has also submitted that the respondent has already paid the interest demanded from them in terms of said order along with 25% of the penalty imposed, within 30 days of receipt of the said order.

3. Nobody appeared on behalf of the respondent.

4. Learned AR has reiterated the grounds taken by the Department in Appeal Memorandum.

5. The short question for determination in this appeal is whether the Adjudicating Authority was correct in extending the benefit of payment of 25% of imposed penalty in terms of provisions under Section 114A as well as under Section 11AC(c) of Central Excise Act or otherwise.

6. The respondent have also filed memorandum of cross objections, wherein they have sought relief for setting aside the portion of the order imposing penalty of Rs. 80,65,890/- under Section 112(ii) as the goods imported were not liable to confiscation under Section 111. Similarly, they have shifted that penalty imposed under Rule 25(b) of Central Excise Rules, 2002 is also liable to be set aside as indigenously procured goods are not liable for confiscation under Rule 25(b) and the refund of penalty paid @ 25% of the total penalty by them be made by Department.

7. We find that since the appellants were aggrieved by certain part of the impugned order and therefore they are entitled to file cross objections and the same is to be treated as an appeal in terms of Section 129(4) of the Customs Act 1962.

8. Heard Learned AR and perused documents on record.

9. The brief facts of the case are that the respondents are 100% EOU and certain demands were made due to non-meeting of Net Foreign Exchange Earning (NFEE). A show cause notice dated 31.05.2012 was issued to the respondent and the Commissioner passed an order dated 31.12.2012 confirming demand in terms of B-17 bond and conditions of the relevant notification under which the goods have been procured without payment of duty. The respondent went to Tribunal against th