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2014 (1) TMI 1212 - HC - Central ExcisePenalty u/s 11AC - Mandatory or directory - Held that:- penalty provision under section 11AC and also Rule 96-ZQ and 96ZO of Central Excise Rules,1944 as to whether the penalty provision is mandatory or discretionary, rejecting the plea that Rules 96ZQ and 96ZO have a concept of discretion inbuilt - reference was made for determination as to whether Section 11AC of the Central Excise Act, 1944 inserted by the Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is scope of levying penalty below the prescribed minimum - Observing that the levy of penalty is a mandatory penalty and there is no scope for any discretion and rejecting the plea that Rules 96ZQ and 96ZO have a concept of discretion in-built - The matter is remitted to CEGAT for reconsidering the matter afresh in the light of the law laid down by the Hon’ble Supreme Court in the case of Dharamendra Textile Processors & Ors. reported in (2007 (7) TMI 307 - SUPREME COURT OF INDIA) and further clarified in the case of Union of India Vs. Rajasthan Spinning & Weaving Mills reported in (2009 (5) TMI 15 - SUPREME COURT OF INDIA) - Decided in favour of Revenue.
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