Judgment R. Sudhakar, J. 1. The above Civil Miscellaneous Appeals filed by the appellants as against the order of the Customs, Excise and Service Tax Appellate Tribunal were admitted by this Court on the following substantial questions of law: "1. Whether the 1st respondent Tribunal was correct in imposing penalty and interest when the 2nd respondent had not even alleged in the grounds of appeal that the case is not pertaining to interpretation of notifications. When this is the case, whether, penalty under Section 11AB is maintainable? 2. Whether the 1st respondent Tribunal was correct in imposing interest under Section 11AB when in the present case, the period of dispute is from 1995 to 1996 to 1999-2000. It is settled law that Section 11AB which pertains to interest cannot be invoked for the period prior to the enactment of Finance Bill, 2001? And 3. Whether the 1st respondent Tribunal ought to have considered that penalties were imposed under Rule 173Q and did not call for a consequential imposition of penalty under Section 11AC?" 2. When the matter was called on 06.11.2014, it was submitted by Mr. Muthuvenkataraman, learned counsel that he is going to file vakalat for the appellants. Hence, the matter was adjourned. Again when the matter was called on 21.11.2014, the said counsel has not filed vakalat. Hence this Court directed the Registry to print the name of the appellant and post the matter on 27.11.2014. This Court also observed that in the meanwhile, if the counsel is able to file vakalat, he is entitled to pursue the matter or otherwise the Court will decide the matter based on the relevant records. Today (27.11.2014), when the matter was called, none appears for the appellant and the above-said counsel has not filed vakalat so far. Hence, after hearing the learned standing counsel appearing for the Department and after perusing the materials placed on record, we pass the following order. 3. The appellants are engaged in the manufacture of Dextrine and other modified starches, classifiable under Chapter heading 3505.20 and starch, classifiable under Chapter heading 1103.10 of Central Excise Tariff Act, 1985. Hence, after hearing the learned standing counsel appearing for the Department and after perusing the materials placed on record, we pass the following order. 3. The appellants are engaged in the manufacture of Dextrine and other modified starches, classifiable under Chapter heading 3505.20 and starch, classifiable under Chapter heading 1103.10 of Central Excise Tariff Act, 1985. They cleared their goods from their factory on their own account and also on job work basis to their two related trading concerns without bringing into the knowledge of the Department, without taking out registration, without following the procedure and without payment of duty in contravention of Rules 9(1), 52A, 173B, 173C, 173F, 173G and 226 of the Central Excise Rules, 1944 read with Section 6 of the Central Excise Act, 1944. Hence show cause notices were issued to the appellants dated 31.7.2000 and 25.10.2000 respectively stating that why duty should not be demanded and penalty should not be imposed. 4. After taking into consideration the response filed by the appellants, the Adjudicating Authority, in respect of Indoz Polymers and Products (appellant in C.M.A.No.272 of 2007), passed the following order: "(i) I confirm and demand duty of Rs.31,69,507/-(Rs.Thirty One Lakhs Sixty Nine Thousand Five Hundred and Seven Only) from M/s. Indoz Polymers and Products for the clearances effected during the period from 1995-96 to 1999-2000 and covered under show cause notice vide C.No.V/3505/15/96/2000 Cx.Adj. dated 31.7.2000 under Rule 9(2) of the erstwhile Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944 read with Section 38A of the Central Excise Act, 1944. (ii) I drop further proceeding initiated in the show cause notice issued under C.No.V/35/15/96/2000 Cx.Adj. dated 21.6.2001. (iii) I appropriate Rs.2,60,000/- and Rs.18,00,000/-available in the form of Bank Guarantee furnished as security in connection with execution of B11 Bond, towards the above duty liability. I also appropriate a sum of Rs.90,411/0 already paid in this regard by the noticee voluntarily vide Challan No.1/11.10.2001 towards duty payable on the modified starch cleared during the years 1996-97 to 1998-99. (iii) I appropriate Rs.2,60,000/- and Rs.18,00,000/-available in the form of Bank Guarantee furnished as security in connection with execution of B11 Bond, towards the above duty liability. I also appropriate a sum of Rs.90,411/0 already paid in this regard by the noticee voluntarily vide Challan No.1/11.10.2001 towards duty payable on the modified starch cleared during the years 1996-97 to 1998-99. (iv) I impose a penalty of Rs.3,00,000/- (Rupees three lakhs only) on M/s. Indoz Polymers and Products under Rule 173 Q and 226 of the Erstwhile Central Excise Rules, 1944 for the contravention of Rules 9(1), 52A, 173B, 173C, 173F, 173G and 226 of the erstwhile Central Excise Rules, 1944, Rule 25 of the Central Excise Rules, 2002 read with Section 38A of the Central Excise Act, 1944. (v) I also impose a penalty of Rs.5,000/- (Rupees five thousand only) each, on M/s.Hind Amylose Products, M/s. Indo Chem & Co., M/s. Indo Organic & Chemicals and M/s. M.S. Traders under Rule 209A of the erstwhile Central Excise Rules, 1944, Rule 26 of the Central Excise Rules, 2002 read with Section 38A of the Central Excise Act 1944." 5. Similarly, in respect of Indochem & Co., (appellant in C.M.A.No.273 of 2007) the Adjudicating Authority passed the following order: "(i) I confirm and demand duty of Rs.3,30,117/- (Rs. Three Lakhs Thirty Thousand One Hundred and Seventeen Only) from M/s.Indo Chem & Co. for the clearances effected during the period from 1995-96 to 1999-2000 and covered under show cause notice vide C.No.V/35/15/131/2000 Cx.Adj. dated 25.10.2000 under Rule 9(2) of the erstwhile Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944 read with Section 38A of the Central Excise Act, 1944. (ii) I appropriate a sum of Rs.77,814/- already paid in this regard by the noticee vide TRS challan No.1 dated 11.10.2001 towards discharge of duty liability on modified starch cleared during the years 1996-97 to 1997-98. I also appropriate an amount of Rs.2,52,303/- from the Bank Guarantee of Rs.9,76,290/- (Dena Bank) furnished as security in connection with execution of B11 Bond, towards the above duty liability. (iii) I impose a penalty of Rs.30,000/- (Rupees thirty thousand only) on M/s. Indo Chem & Co. I also appropriate an amount of Rs.2,52,303/- from the Bank Guarantee of Rs.9,76,290/- (Dena Bank) furnished as security in connection with execution of B11 Bond, towards the above duty liability. (iii) I impose a penalty of Rs.30,000/- (Rupees thirty thousand only) on M/s. Indo Chem & Co. under Rule 173Q and 226 of the Erstwhile Central Excise Rules, 1944 for the contravention of Rules 9(1), 52A, 173B, 173C, 173F, 173G and 226 of the erstwhile Central Excise Rules, 1944, Rule 25 of the Central Excise Rules, 2002 read with Section 38A of the Central Excise Act, 1944. (iv) I also impose a penalty of Rs.5,000/-(Rupees five thousand only) each, on M/s. Hind Amylose Products and M/s. Indo Organic & Chemicals under Rule 209A of the erstwhile Central Excise Rules, 1944, Rule 26 of the Central Excise Rules, 2002 read with Section 38A of the Central Excise Act 1944." 6. The Adjudicating Authority, however, did not impose penalty under Section 11AC of the Central Excise Act. The appellants at that point of time accepted the order of the Adjudicating Authority and did not proceed further. But the Commissioner of Central Excise, Salem chose to file appeals before the Tribunal contending that the Adjudicating Authority ought to have imposed penalty under Section 11AC of the Central Excise Act, which is mandatory. 7. The Tribunal, while accepting the plea of the Department that penalty under Section 11AC of the Central Excise Act, 1944 is leviable, referred to the decision of the Tribunal in the case of Prem Pharmaceuticals Ltd. Vs. CCE reported in 2004 (172) ELT 273 (T), wherein, the Tribunal set aside the penalty imposed under Section 11AC on the ground that the dispute in that case involved interpretation of the scope of exemption notifications. The Tribunal held that the Adjudicating Authority was guided by the decision in the case of Prem Pharmaceuticals Ltd. Vs. CCE reported in 2004 (172) ELT 273 (T) and thought it fit not to impose penalty under Section 11AC. However, the Tribunal, taking note of the mandatory nature of the provision under Section 11AC and holding that interpretation of the exemption notification was involved in the case, imposed penalty at Rs.10,000/- in the case of M/s. Indoz Polymers and Products and Rs.1.00 lakh in the case of M/s. Indo Chem & Co. 8. However, the Tribunal, taking note of the mandatory nature of the provision under Section 11AC and holding that interpretation of the exemption notification was involved in the case, imposed penalty at Rs.10,000/- in the case of M/s. Indoz Polymers and Products and Rs.1.00 lakh in the case of M/s. Indo Chem & Co. 8. Aggrieved by the said order of the Tribunal, the appellants are before this Court contending that the order of the Original Authority is correct and penalty under Section 11AC of the Central Excise Act ought not to have been imposed, since it pertains to interpretation of notification and consequently, interest under Section 11AB of the Central Excise Act is not maintainable. 9. Before going into the merits of the case, for better clarity, we extract hereunder the relevant provisions, namely, 11AC and 11AB of the Central Excise Act. "SECTION 11AC. Penalty for short-levy or non-levy of duty in certain cases. 9. Before going into the merits of the case, for better clarity, we extract hereunder the relevant provisions, namely, 11AC and 11AB of the Central Excise Act. "SECTION 11AC. Penalty for short-levy or non-levy of duty in certain cases. — Where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined : Provided that where such duty as determined under sub-section (2) of section 11A, and the interest payable thereon under section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five percent of the duty so determined : Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso : Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty as reduced or increased, as the case may be, shall be taken into account : Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty-five per cent. of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation. of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation. - For the removal of doubts, it is hereby declared that – (1) the provisions of this section which the order determining the duty under shall also apply to cases in sub-section (2) of section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (2) any amount paid to the credit of to the date of communication of the order referred the Central Government prior to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person. (1) Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person who is liable to pay the duty as determined under subsection SECTION 11AB. Interest on delayed payment of duty. -(2), or has paid the duty under sub-section (2B), of section 11A, shall, in addition to the duty, be liable to pay interest at such rate not below [ten per cent.] and not exceeding thirty-six per cent. per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of section 11A till the date of payment of such duty: Provided that in such cases where the duty becomes payable consequent to issue of an order, instruction or direction by the Board under section 37B, and such amount of duty payable is voluntarily paid in full, without reserving any right to appeal against such payment at any subsequent stage, within forty-five days from the date of issue of such order, instruction or direction, as the case may be, no interest shall be payable and in other cases the interest shall be payable on the whole of the amount, including the amount already paid. (2) The provisions of sub-section (1) shall not apply to cases where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. Explanation 1. - Where the duty determined to be payable is reduced by the Commissioner (Appeals), the Appellate Tribunal, National Tax Tribunal or, as the case may be, the court, the interest shall be payable on such reduced amount of duty. Explanation 2. - Where the duty determined to be payable is increased or further increased by the Commissioner (Appeals), the Appellate Tribunal, National Tax Tribunal or, as the case may be, the court, the interest shall be payable on such increased or further increased amount of duty. 10. Section 11AC of the Central Excise Act was introduced by Finance (No.2) Act, 1996 with effect from 28.9.1996. Section 11AC of the Central Excise Act gets attracted where any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. The person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined. 11. This provision was subject matter of several interpretations before the Tribunal and finally to resolve the issue as to the mandatory nature of penalty under Section 11AC of the Central Excise Act, the Larger Bench of the Supreme Court in the case of Union of India and Others V. M/s Dharamendra Textile Processors and Others reported in 2008 (231) ELT 3 (SC) came to hold that penalty under Section 11AC of the Central Excise Act is mandatory and there is no element of discretion. Thus the question of law that was referred to the Larger Bench was answered holding that the decision in the case of Chairman, SEBI V. Shriram Mutual Fund reported in 2006 (5) SCC 361 is correct. In fact, in paragraph Nos.26 and 27 of the decision the Supreme Court referred to the object behind the introduction of this provision and we extract the relevant portion as such, hereunder: "26. In fact, in paragraph Nos.26 and 27 of the decision the Supreme Court referred to the object behind the introduction of this provision and we extract the relevant portion as such, hereunder: "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. 27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff’s case (supra) was not correctly decided but Chairman, SEBI’s case (supra) has analysed the legal position in the correct perspectives. The reference is answered. The mater shall now be placed before the Division Bench to deal with the matter in the light of what has been stated above, only so far as the cases where challenge to vires of Rule 967Q(5). In all other cases the orders of the High Court or the Tribunal, as the case may be, are quashed and the matter remitted to it for disposal in the light of present judgments. Appeals except Civil Appeal Nos. 3388 of 2006, 3397 of 2003, 3398-99 of 2003, 4096 of 2004, 4316 of 2007, 4317 of 2007, 5277 of 2006, 675 of 2007, 1420 of 2007 and appeal relating to SLP (C ) No.21751 of 2007 are allowed and the excepted appeals shall now be placed before the Division Bench for disposal." 12. This decision was rendered by the Supreme Court on 29.9.2008. At the time of admission of these appeals, this Court did not have the benefit of this decision. Apparently, the Tribunal was also deciding the issue on the basis of law that was prevailing at that point of time and the various Tribunals took a view that the element of discretion was available while imposing penalty under Section 11AC of the Central Excise Act. Apparently, the Tribunal was also deciding the issue on the basis of law that was prevailing at that point of time and the various Tribunals took a view that the element of discretion was available while imposing penalty under Section 11AC of the Central Excise Act. Since that issue stands resolved by the Larger Bench of the Supreme Court, the first substantial question of law admitted by this Court does not bear any significance, since the levy of penalty under Section 11AC, has therefore become mandatory, nevertheless, the Tribunal has chosen to impose lesser amount of penalty, against which the Department has not filed any appeal. 13. The assessees/appellants are before us contending that no penalty could be imposed. However, as the position now stands resolved in view of the Larger Bench decision of the Supreme Court cited supra, the first substantial question of law is answered against the appellants and in favour of the Revenue. 14. The second substantial question of law raised and admitted by this Court is based on the presumption that Section 11AB could not be invoked for the period prior to the enactment of Finance Bill, 2001, to mean thereby, prior to 2001, Section 11AB was not applicable. The provisions of Section 11AB of the Central Excise Act came into effect from 28.9.1996 by Finance (No.2) Act, 1996. No doubt that in the year 2001, there is a change in the rate of interest from 11.5.2001 from 10% - 36% to 18% - 36% that is irrelevant. Therefore, the plea of the appellants that the Tribunal ought not to have been imposed interest under Section 11AB of the Central Excise Act is misconceived. Accordingly, the second substantial question of law is answered against the appellants and in favour of the Revenue. 15. With regard to the third substantial question of law that once Penalty is imposed under Rule 173Q of the Central Excise Rules, no penalty could be imposed under Section 11AC of the Central Excise Act, when Section 11AC was introduced by Finance (No.2) Act, 1996 with effect from 28.9.1996, there is no bar in Section 11AC of the Central Excise Act to impose of penalty under Rule 173Q of the Central Excise Rules. Nevertheless, when Finance (No.2) Act 1996 brought in amendment by way of introduction of Section 11AC and other provisions, there was no corresponding amendment to Rule 173Q holding that if penalty is leviable under Section 11AC, no penalty could be levied under Rule 173Q of the Central Excise Rules. 16. We also have to notice the scope of penalty under Rule 173Q of the Central Excise Rules and Section 11AC of the Central Excise Act on the basis of the decision of the Supreme Court in the case of Zunjarrao Bhikaji Nagarkar Union of India & Ors reported in 1999 (112) ELT 772 , wherein the Supreme Court held as follows: "21. Two principal issues arise for our consideration : (1) if levy of penalty under Rule 173Q was obligatory and (2) was there enough background material for the Central Government to form a prima facie opinion to proceed against the officer on the charge of misconduct on his failure to levy penalty under Rule 173Q. Appellant has contended that it is only now after insertion of Section 11AC in the Act that levy of penalty has become mandatory and that it was not so under Rule 173Q. This contention does not appear to be correct. In both Rule 173Q and Section 11AC the language is somewhat similar. Under Rule 173Q “such goods shall be liable to confiscation” and the person concerned “shall be liable to penalty” not exceeding three times the value of excisable goods or five thousand rupees whichever is greater. Under Section 11AC the person, who is liable to pay duty on the excisable goods as determined “shall also be liable to pay penalty equal to the duty so determined”. What is the significance of the word “liable” used both in Rule 173Q and Section 11AC? Under Rule 173Q apart from confiscation of the goods the person concerned is liable to penalty. Under Section 11AC the word “also’ has been used but that does not appear to be quite material in interpreting the word “liable” and if liability to pay penalty has to be fixed by the adjudicating authority. The word “liable” in the Concise Oxford Dictionary means, “legally bound, subject to a tax or penalty, under an obligation”. In Black’s Law Dictionary (sixth edition), the word “liable” means, “bound or obliged in law or equity; responsible; chargeable; answerable; compellable to make satisfaction, compensation, or restitution... The word “liable” in the Concise Oxford Dictionary means, “legally bound, subject to a tax or penalty, under an obligation”. In Black’s Law Dictionary (sixth edition), the word “liable” means, “bound or obliged in law or equity; responsible; chargeable; answerable; compellable to make satisfaction, compensation, or restitution... Obligated; accountable for or chargeable with. Condition of being bound to respond because a wrong has occurred. Condition out of which a legal liability might arise.... Justly or legally responsible or answerable”. 22. When we examine Rule 173Q it does appear to us that apart from the offending goods which are liable to confiscation the person concerned with that shall be liable to penalty upto the amount specified in the Rule. It is difficult to accept the argument of the appellant that levy of penalty is discretionary. It is only the amount of penalty which is discretionary. Both things are necessary : (1) goods are liable to confiscation and (2) person concerned is liable to penalty. We may contrast the provisions of Rule 173Q and Section 11AC with Section 271 of the Income-tax Act, 1961." 17. The penalty under Rule 173Q of the Central Excise Rules is consequent to confiscation of goods, whereas penalty under Section 11AC of the Central Excise Act is equivalent to the duty determined. Therefore, there appears to be no mutual exclusion in relation to levy of penalty under Rule 173Q and Section 11AC. Accordingly, we answer the third substantial question of law in favour of the Revenue and against the assessee. 18. In the result, both the above Civil Miscellaneous Appeals stand dismissed. No costs. Consequently, M.P.Nos.1 and 2 of 2007 are also dismissed.