TMI Blog2014 (7) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on the due date. Decision in the case of K.S. VENKATARAMAN & CO. (P) LTD. V. STATE OF MADRAS [1965 (10) TMI 11 - SUPREME Court] followed - Any assessment made on the basis of such a void provision cannot be a decision under the provisions of the Act. Briefly stated, the procedural machinery under the Act can be utilized only to decide disputes that arise under the substantive provisions of the Act which are not ultra vires. - Decided against the revenue. - C.E.A.Nos.18 of 2006, C.E.A.Nos.18, 24, 29, 30, 32, 36 and 37 of 2006 - - - Dated:- 29-4-2014 - Sri G. Chandraiah And Sri Challa Kodanda Ram,JJ. For the Appellants : Sri V. Gopala Krishna Gokhale For the Respondents : Sri S. Ravi JUDGMENT (Per Honble Sri Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th. The verification of RT 12 returns for the months of April 1998 to September 1998 revealed that assessee has not paid duty due on the specified dates, but paid subsequently. On the above violation, Rule 96 ZO of the Central Excise Rules, 1944 (as existing then) was invoked and assessee was directed to pay penalty of ₹ 4,99,666/- invoking Rule 96ZO(3), which mandates imposition of penalty equivalent to outstanding amount of duty or ₹ 5,000/- whichever is greater. On appeal being filed by the respondent herein, the Commissioner vide his order 31-12-2003 by placing reliance in NIRAV TEXTILE PROCESSORS Vs. CCE, MUMBAI-VI [2002 (148) ELT 838 (Tri.-Mumbai)] had reduced the penalty to ₹ 5,000/- while retaining the levy of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CESTAT is erroneous and requires to be set aside and the questions need to be answered in favour of the Department and against the assessee. 5. On the other hand, Sri S.Ravi, learned senior counsel appearing on behalf of the respondent would submit that the law laid down by the 2-Judge Bench of the Honble Supreme Court in DHARAMENDRA TEXTILES case (4 Supra) is running contrary to a large number of earlier decisions of the larger Bench judgment of Honble Supreme Court, wherein penalty proceedings have always held to be in the nature of quasi criminal proceedings and there is an element of discretion left with the authorities to impose proportionate penalty depending on the facts of the case. However, he would fairly submit that consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y equivalent to the duty amount even for a delayed payment of one day is totally unsustainable and would be totally unauthorized. He would also urge that this Court exercises the jurisdiction of the appellate court over the orders of the CESTAT and as an appellate court, it is strictly bound to apply the provisions of the Act and the Rules. He would further urge that there being no rule and Rules 96ZO, 96ZP and 96ZQ having been struck down by the Constitutional Court and even within the ratio laid down by the Honble Supreme Court in DHARAMENDRA TEXTILES case (4 Supra), the levy of penalty under a non-existing rule would be illegal and viewed from that angle, the order of the CESTAT would be unexceptional. 6. Having considered the rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstrued in vacuum: they must be collated with the charging sections; that is to say, the Act provided for a machinery for deciding disputes that arise under the substantive provisions of the Act. To illustrate: suppose there is provision in the Act to the effect that the said Act does not apply to indivisible building contracts. Can the officer decide that the Act applies to such building contracts? Such a decision, if given, will not be under but outside the Act. Take another illustration: suppose this Court has held that a provision authorising the taxing of an indivisible building contract is ultra vires the power of the State Legislature and, therefore, void; in that event, how can an authority functioning under the Act tax such a cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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