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2010 (11) TMI 83 - HC - Central ExcisePenalty – Mandatory penalty – Delay in payment of duty – compounded levy scheme - power to make rule for levying penalty equal to the outstanding amount of duty could be exercised only if the default was with intent to evade payment of duty - rule making authority could not go beyond the Act and when the Act provides for requirement of mens rea, the rule could not dispense with the said requirement - provision for minimum mandatory penalty equal to the amount of duty even for slightest bona fide delay without any element of discretion is beyond the purpose of legislation – Held that: - Mere fact that without mens rea, an can be punished or a penalty could be imposed is not a blanket power without providing for any justification - power of legislature is circumscribed by fundamental rights - writ petitions of the assessees are allowed and impugned provisions in Rules 96(ZO), (ZP) and (ZQ) permitting minimum penalty for delay in payment, without any discretion and without having regard to extent and circumstances for delay are held to be ultra vires the Act and the Constitution - penalty has been sustained by the Tribunal to the extent of 100% which will stand quashed without prejudice to any fresh order being passed in accordance with law - appeal disposed of
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