JUDGMENT By the Court.—The assessee M/s K.A. Forward Shoe Factory, Agra has preferred this appeal under Section 35G of the Central Excise Act, 1944 (hereinafter referred to as the Act) against the order dated 9.9.2010 of the Central Excise & Service Tax Appellate Tribunal (In short CESTAT). 2. The assessee is a company engaged in the manufacturing of shoes which are excisable goods. 3. During inspection of the factory premises of the assessee by the Central Excise Officers some discrepancy in the stocks was detected. The assessee accepted the same and on the basis of the discrepancies so detected, deposited an additional duty of Rs. 3,29,192/- on 5.1.2006. Subsequently, a show-cause notice dated 30.11.2006 was issued to it demanding explanation with regard to short deposit of the above duty and imposition of penalty under Section 11AC of the Act. 4. The show-cause notice was adjudicated by the Assistant Commissioner vide order in original dated 3.9.2007. The demand of excise duty of Rs. 3,29,192/- was confirmed but as the said amount had already been deposited it was directed to be appropriated towards the demand. At the same time an equal amount of penalty of Rs. 3,29,192/- was imposed under Section 11AC of the Act read with Rule 25 of the Central Excise Rules. 5. The appeal of the assessee to the Commissioner (Appeals) was dismissed on 5.11.2007 and so was the appeal preferred before the CESTAT vide the impugned order leading to this appeal by the assessee. 6. The appeal was admitted by this Court on 7.3.2013 on the substantial questions of law as framed in the memo of appeal which reads as under : “a) Whether the CESTAT was justified in imposing penalty under Section 11AC of the Act, ignoring the fact that the Appellant has voluntarily paid the amount of duty equivalent to cenvat credit availed on the shortage of inputs as such issuance of show-cause notice itself is without jurisdiction in view Section 11A(2B) of the Central Excise Act, 1944. b) Whether in the alternative, the CESTAT was justified in not considering that duty was paid much prior to the passing of the order by the adjudicating authority, as such there was no justification for imposing 100% penalty and at the most 25% penalty may have been imposed in view of the proviso to the Section 11AC of the Central Excise Act, 1944.” 7. We have heard Sri Suyash Agarwal and Sri Krishna Agarwal learned counsel for the parties on merits of the above questions of law. 8. The first submission of Sri Suyash Agarwal, learned counsel for the assessee is that in view of Section 11A(2B) of the Act as stood at the relevant time, as the assessee had deposited the entire excise duty on the basis of his own ascertainment before the service of notice upon it under Sub-Section (1) and had given information of it to the Central Excise Officer no notice under Sub-Section (1) in respect of the duty so paid could have been issued to it meaning thereby that no penalty could have been levied upon it under Section 11AC of the Act. 9. The relevant portion of Section 11A(1) and 11A (2B) of the Act as it stood at the relevant time are quoted below : “11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded—(1)When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within one year from relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show-cause why he should not pay the amount specified in the notice.” Provided................ “(2B) Where any duty or excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty, may pay the amount of duty on the basis of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer before service of notice on him under sub-section(1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section(1) in respect of the duty so paid.” 10. A bare reading of Sub-Section(1) of Section 11A of the Act indicates that it envisages recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. It provides that in either of the above situation the Excise Officer may serve notice on the person chargeable with duty requiring him to show-cause why he should not pay the amount of duty specified in the notice. It means that the notice referred to is in respect of realisation of the excise duty only and not the penalty. 11. Sub-Section (2B) of Section 11A of the Act provides that in cases where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded the person chargeable with the duty if pays the duty on the basis of his own ascertainment or on the basis of the adjudication by the Central Excise Officer before any notice is served upon him under Sub-Section (1) of Section 11A of the Act, the Central Excise Officer shall not serve any notice under Sub-Section (1) of the Act in respect of the duty so paid by him on receipt of information in respect of the duty so paid. 12. In simple words the excise duty not levied or paid or short-levied or short-paid or which is erroneously refunded if deposited before the issuance of show-cause notice under Sub-Section (1) of Section 11A of the Act, the Central Excise Officer on receiving information of the said deposit shall not issue any show-cause notice as contemplated by Sub-Section (1) of Section 11A of the Act. The use of the expressions “in respect of the duty” and “in respect of the duty so paid” in Sub-Section (2B) of Section 11A of the Act clearly establishes that it refers to the notice for the purposes of realisation of the excise duty and the payment thereof. This is also clear from the language of Sub-Section (1) of Section 11A of the Act which requires issuance of show-cause notice in respect of the excise duty only. 13. The reading of the above two provisions establishes beyond doubt that Section 11A of the Act has no application in respect of realisation of penalty if any imposed under Section 11AC of the Act. 14. 13. The reading of the above two provisions establishes beyond doubt that Section 11A of the Act has no application in respect of realisation of penalty if any imposed under Section 11AC of the Act. 14. Accordingly, the aforesaid question is answered against the assessee and in favour of the revenue holding that the imposition of penalty under Section 11AC of the Act is justified even though the duty of excise has been paid voluntarily by the assessee and the notice issued for imposing penalty was neither without jurisdiction or in violation of Section 11A(2B) of the Act which in fact was not applicable. 15. The other question of law before us is about the quantum of the penalty whether it has to be 25% of the shortage of excise duty paid and determined or equal to the amount of the shortage of excise duty. 16. The argument of Sri Suyash Agarwal in this regard is that as the assessee had deposited the entire excise duty voluntarily and the interest thereon if any before the issuance of show-cause notice, he is liable to pay only 25% of the duty as penalty. 17. In support of his argument he has placed reliance upon the Division Bench decision of Delhi High Court in the case of K.P. Pouches (P) Ltd. v. Union of India, 2008 (228) ELT 31 (Delhi), which is said to have been followed by the Division Bench of our High Court as well. 18. In response to the above argument Sri Krishna Agarwal, had submitted that the above decision of the Delhi High Court has been distinguished by the Delhi High Court itself as well as by the Bombay High Court. 19. There is no provision under the Act which places any obligation upon the adjudicating authority to first determine the penalty equal to 25% of the excise duty not levied or short levied or erroneously refunded and in the event it is not paid within 30 days to proceed to levy penalty of 100% of the deficient excise duty. 20. Section 11AC of the Act as was applicable at the relevant time is quoted below: “11AC. 20. Section 11AC of the Act as was applicable at the relevant time is quoted below: “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 mis-statement 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 be twenty-five per cent 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........................... Provided...........................” 21. Section 11AC of the Act contemplates imposition of penalty equal to the amount of duty determined where a person liable to pay duty has not paid the duty levied or has short-paid the same or has been refunded any duty erroneously for any of the reasons specified therein with the intention to evade payment of duty. 22. The penalty leviable under Section 11AC of the Act is mandatory and not discretionary as has been held by the Apex Court in the case of Union of India v. Rajasthan Spinning and Weaving Mills, 2009 (238) ELT 3 (SC). 23. The Apex Court in the aforesaid case has laid down that once it is held that Section 11AC of the Act is attracted then the concerned authority would not have any discretion and penalty must be imposed equal to the amount of the duty determined. It means in cases were Section 11AC of the Act applies penalty equal to 100% of the duty determined has to be imposed mandatorily and not of any lessor amount of duty. 24. It means in cases were Section 11AC of the Act applies penalty equal to 100% of the duty determined has to be imposed mandatorily and not of any lessor amount of duty. 24. In the case at hand, the assessee had defaulted in the timely payment of excise duty of Rs. 3,29,192/-. It may have been paid by it voluntarily of his own ascertainment before the issuance of the notice nonetheless there was no default in its timely payment and was paid only after the shortage was detected. Therefore, ex facie there was contravention of the provisions of the Act in the payment of duty which was held to be with the intent to evade duty so as to attract Section 11AC of the Act. Therefore, once Section 11AC of the Act was attracted, a penalty equal to the amount of the duty evaded as determined was payable. 25. The first proviso to Section 11AC of the Act provides for the rebate in the payment of penalty provided the duty determined under Section 11A(2) of the Act and the interest payable thereon under Section 11AB of the Act is paid within 30 days from the date of communication of the order of the Central Excise Officer determining such duty. It lays down if the duty so determined with interest is paid within 30 days the penalty under Section 11AC shall be payable @ 25% of the duty so determined. However, there is a further proviso to it which lays down that the benefit of the above reduced penalty is admissible only if the amount of penalty so determined is also paid within 30 days of the communication of the order of the Central Excise Officer determining the duty. In other words, the aforesaid rebate in penalty is admissible on the deposit of not only the excise duty determined and the interest thereon but also 25% of the penalty so imposed within a period of 30 days of the service of the order. 26. There is no dispute that the assessee had deposited the duty determined and the interest even prior to determination of it by the Central Excise Officer but 25% of the penalty amount was not deposited by it within 30 days of the order which means it disentitled itself from the benefit of the reduced penalty as per the second proviso to Section 11 AC of the Act. 27. The decision of the Delhi High Court in the case of K.P. Pouches Pvt. Ltd. (Supra) which lays down that the adjudicating authority could have demanded 100% of the duty amount by way of penalty only if it had given an option to the assessee to pay 25% of the duty amount by way of penalty and since this was not done the authority was in error in demanding 100% of the duty by way of penalty was clearly distinguished by the Division Bench of the Bombay High Court in Commissioner of Central Excise, Raigad v. Castrol India Ltd., 2012(286) ELT 194 (Bom). 28. This was an identical case as we are dealing with regarding imposition of penalty under Section 11AC of the Act and the precise question before the Court was whether under the facts and circumstances of the case 25% of the duty determined was payable by way of penalty or it ought to have been 100% of the duty. 29. The Division Bench observed that reading of Section 11AC of the Act with the first and the second proviso makes it clear that where Section 11AC of the Act is attracted the liability to pay penalty is 100% of the duty determined under Section 11A of the Act. However, if the duty so determined together with interest is paid within 30 days from the date of communication of the order of the Central Excise Officer determining the duty, the penalty payable shall be 25% of the duty so determined provided further that the reduced penalty of 25% of the duty determined is also paid within 30 days of the communication of the order. 30. The aforesaid decision in other words laid down that if the duty determined, interest and 25% of the penalty amount is deposited within 30 days of the communication of the order determining duty and penalty, then alone the assessee is entitle to remission of 75% of the penalty amount. Therefore, deposit of 25% of the penalty amount is also a pre-requisite for availing the benefit of reduced penalty. 31. Therefore, deposit of 25% of the penalty amount is also a pre-requisite for availing the benefit of reduced penalty. 31. The aforesaid decision went on to hold that the legislature while mandatorily imposing penalty under Section 11AC of the Act equal to 100% of the duty determined provides an incentive to the assessee by providing that if the duty determined together with interest is paid within the stipulated time then the penalty payable would be 25% of the penalty imposed subject to the condition that the said 25% of the penalty is also paid within the stipulated period. 32. Section 11AC of the Act neither requires the Central Excise Officer to determine the quantum of penalty to be 25% of the duty nor it require the Central Excise Officer to communicate the option available to the assessee under Section 11AC of the Act with regard to payment of 25% of the penalty. 33. The determination of duty and penalty by itself is sufficient on part of the Central Excise Officer. It is then upon the assessee to pay 25% of the penalty within the stipulated period of 30 days to avail the benefit of the reduced penalty or to pay the whole of it. 34. The view expressed by the Castrol India Ltd. (Supra) was followed with approval by the Division Bench of the Delhi High Court in Principal Commissioner of Service Tax, Delhi-II v. Tops Security Ltd., 2016 (41) STR 612 (Del.), in a matter relating to service tax which contained an identical provision with regard to reduced penalty of 25%. In this case also the Division Bench distinguished the earlier Division Bench of the Delhi High Court in K.P. Pouches Pvt. Ltd. (Supra) held that where the assessee failed to pay even 25% of the penalty or to show any inclination to pay it with the stipulated time, he is liable for payment of the full amount of the penalty imposed. It also held following the decision of the Gujrat High Court in Commissioner v. Ratnamani Metals and Tubes Ltd., 2013 (296) ELT 327 (Guj.), that it is not mandatory upon the adjudicating authority to draw the attention of the assessee to the benefit of the reduced penalty under the proviso to Section 11AC of the Act. It also held following the decision of the Gujrat High Court in Commissioner v. Ratnamani Metals and Tubes Ltd., 2013 (296) ELT 327 (Guj.), that it is not mandatory upon the adjudicating authority to draw the attention of the assessee to the benefit of the reduced penalty under the proviso to Section 11AC of the Act. Thus, the benefit of the reduced penalty is available to the assessee only if he deposits the tax, interest and the amount of penalty within 30 days of the communication of the order of the adjudicating authority. 35. In view of the above two decisions of the Bombay and Delhi High Court which have fairly distinguished the earlier decision of the Delhi High Court in K.P. Pouches Pvt. Ltd. (Supra), we are of the conclusive opinion that the benefit of reduced penalty of 25% is available to the assessee only on depositing the deficiency in duty determined with interest but also 25% of the duty determined by way of penalty within the stipulated period. 36. Accordingly, the second question is answered against the assessee and in favour of the excise duty. 37. The assessee not having deposited the said amount of 25% of the duty by way of penalty within 30 days of the communication of the order determining the duty and penalty, the assessee dis-entitled itself from the benefit of the reduced penalty. 38. In view of the above discussion the appeal has no merit and stands dismissed.