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2011 (10) TMI 51 - HC - Central ExciseMandatory penalty - the Supreme Court in the case of Dharamendra Textile Processors (2008 (9) TMI 52 - SUPREME COURT ) had left the issue of the vires of Rule 96ZO open to be dealt with by the High Court which was eventually decided by the Punjab and Haryana High Court in Bansal Alloys & Metals Pvt. Ltd. (2010 -TMI - 202136 - PUNJAB & HARYANA HIGH COURT ), in which, it was held that there can not be any equal amount of penalty without mens rea being established. We have gone through the judgment of Punjab and Haryana High Court in Bansal Alloys & Metals Pvt. Ltd. (2010 -TMI - 202136 - PUNJAB & HARYANA HIGH COURT ) and find that Rule 96ZO imposes an unreasonable restriction and is violative of Section 37 of the Act which clearly provides that a Rule can be framed only to the extent that it contravenes the provision of any such rule with intent to evade payment on duty. - Commissioner (Appeals) was justified in reducing the penalty which was rightly upheld by the Tribunal.
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