TMI Blog2014 (11) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... ightest bona fide delay without discretion is beyond the purpose of legislation. It was further held that the provisions in the Rules permitting minimum penalty without any discretion and without having regard to extent and circumstances for delay are ultra vires the Act and the Constitution of India. penalty under Section 11AC is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. there is no scope for exercise of discretion by the Tribunal in the matter of imposing penalty. Consequently, we do not find any reason to interfere with the order of CESTAT, confirming the order passed by the original authority - Following decision of Bansal Alloys & Metals Private Limited v. Union of India [2010 (11) TMI 83 - PUNJAB & HARYANA HIGH COURT] - Decided against assessee. - C.M.A. No. 861 of 2007 - - - Dated:- 5-12-2013 - Chitra Venkataraman and T.S. Sivagnanam, JJ. Shri K. Jayachandran, for the Appellant. Shri Ravi Anantha Padmanabhan, SCGSC, for the Respondent. JUDGMENT This appeal, filed by the assessee, is directed against the order passed by the Customs, Excise and Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d interest, which were kept in abeyance, has been taken up for finalisation. At this stage, the appellant raised certain objections before the Commissioner of Central Excise, the second respondent herein, questioning the levy of interest and penalty. In view of the change in Adjudicating Authority, the asseesee was provided with a fresh opportunity of hearing on 7-1-2003 and 18-2-2003, however, the appellant did not utilise those opportunities given to him. Consequently, the second respondent, by order dated 20-2-2003 imposed penalty of ₹ 33,27,334/- under Rule 96ZP(3) of the Rules, with interest at the rate of 18% on ₹ 33,27,334/- as per Rule 96ZP(3) of the Rules. As against the said order, the appellant preferred the appeal before CESTAT. 4. Before CESTAT, the appellant contended that imposition of penalty as prescribed under Rule 96ZP(3) of the Rules is not mandatory and the maximum amount of penalty prescribed in the said provision alone can be imposed. In this regard, reliance was placed on the decision of the Honourable Supreme Court in the case of (State of Madhya Pradesh v. Bharat Heavy Electricals Limited) - 1998 (99) E.L.T. 33 (S.C.). The revenue resisted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d reliance on the decision of the Gujarat High Court in the case of (Krishna Processors v. Union of India) reported in 2012 (280) E.L.T. 186 (Gujarat). 8. Per contra, the learned standing counsel appearing for the Revenue contended that as against the decision of the Gujarat High Court in the case of (Krishna Processors v. Union of India) reported in 2012 (280) E.L.T. 186 (Gujarat), relied on by the learned counsel appearing for the appellant, revenue has preferred an appeal before the Honourable Supreme Court in SLP (Civil) No. 21273 of 2012 etc., batch and such batch has been tagged along with other batch of cases in SLP (C) No. 19948 of 2011 etc., batch and pending before the Honourable Supreme Court. The learned counsel for the revenue also placed reliance on the notification issued by the Ministry of Finance, Government of India in the Finance (No. 2) Act, 2009 (Act No. 33 of 2009) and submits that under Section 121 of the Finance Act, 2001 (14 of 2001) notification was issued under Section 31 of the Act for validation of certain actions which has been made applicable retrospectively from August, 1997/March, 1998. Therefore, according to the learned standing counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rule 96ZQ of the Rules and action, if any, can be taken only under the regular provisions of the Act. 10. The next question considered by the Division Bench of the Gujarat High Court is whether 38A of the Act saves the obligations and liabilities incurred under Rule 96ZQ of the Rules, and whether the said position would prevail even after the omission of Section 3A of the Act. While answering the said question, the Division Bench held that on a plain reading of the Act, it is manifest that Section 38A of the Act would not save any obligation, liability, etc., acquired, accrued or incurred under any rule, order or notification which has been omitted. Rules 96ZQ, 96ZP and 96ZO of the Rules having been omitted vide notification dated 1-3-2001, any liability or obligation acquired, accrued or incurred thereunder would not be saved under Section 38A of the Act. It was further held that in view of the omission of Rules 96ZQ, 96ZP and 96ZO, no action could thereafter have been initiated thereunder. However, in view of the fact that, the notification dated 1-3-2001 amends the Rules except as respects things done or omitted to be done by such amendment, the pending proceeding already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is extracted hereunder :- 111. Amendment of notifications issued under Section 37 of Central Excise Act and validation of certain actions taken. - (1) The notifications of the Government of India, in the Ministry of Finance (Department of Revenue) numbers G.S.R. 448(E), dated the 1st August, 1997, G.S.R. 503(E), dated the 30th August, 1997 and G.S.R. 130(E), dated the 10th March, 1998, issued under Section 37 of the Central Excise Act, shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified against each of them in column (3) of the Fourth Schedule, on and from the corresponding date mentioned in column (4) of that Schedule and accordingly, notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or any authority, any action taken or anything done or purported to have been taken or done under the said notifications, shall be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if, the notifications as amended by this sub-section had been in force at all material times. (2) Notwithstanding the omission of Section 3A of the Central Excise Act by Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought about by the Finance (No. 2) Act, 2009 (Act No. 33 of 2009) in the notification of the Government of India in G.S.R. 448(E), dated 1-8-1997 and G.S.R. 503(3), dated 30-8-1997, Section 37 of the Act stood amended retrospectively in the manner prescribed in the IV Schedule, which has been referred to above. By virtue of the amendment, notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or any authority, any action taken or anything done or purported to have been taken or done under the said notifications, shall be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if, the notifications as amended by this sub-section had been in force at all material times. Further, clause (2) of the Finance (No. 2) Act, 2009 (Act No. 33 of 2009) states that notwithstanding the omission of Section 3A of the Central Excise Act by Section 121 of the Finance Act, 2001 (14 of 2001) and the expiration of the notifications referred to in sub-section (1), for the purposes of sub-section (1), the Central Government shall have and shall be deemed to have the power to make rules and issue or amend notifications under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is mandatory, yet there is a discretion vested with the authority to impose minimum penalty. In support of this contention, the learned counsel for the appellant relied on the decision of the Punjab Haryana High Court in the case of (Bansal Alloys Metals Private Limited v. Union of India) reported in 2010 (260) E.L.T. 343 (P H). 16. It is argued by the learned counsel for the revenue that as against the decision of the Punjab Haryana High Court referred to above, appeals have been filed before the Honourable Supreme Court and they are pending. 17. In the above decision, the Division Bench of the Punjab Haryana High Court was of the view that Rules 96ZQ, 96ZP and 96ZO of the Rules provides for mandatory penalty, provision for imposition of mandatory penalty even for slightest bona fide delay without discretion is beyond the purpose of legislation. It was further held that the provisions in the Rules permitting minimum penalty without any discretion and without having regard to extent and circumstances for delay are ultra vires the Act and the Constitution of India. This issue is now the subject matter pending before the Honourable Supreme Court in the Special Leave Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty by adopting any of the means mentioned in the section. In para No. 34 of the said decision, it was held as follows :- 34. The decision in Dharamendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. That is what Dharamendra Textile decides. It must, however, be made clear that what is stated above in regard to the decision in Dharamendra Textile is only in so far as Section 11AC is concerned. We make no observations (as a matter of fact there is no occasion for it with regard to the several other statutory provisions that came up for consideration in that decision. 20. Therefore, in the light of the above decision of the Honourable Supreme Court, we hold that there is no scope for exercise of discretion by the Tribunal in the matter of imposing penalty. Consequently, we do not find any reason to interfere with the order of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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