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2015 (1) TMI 542 - AT - Central ExciseImposition of penalty - determination of annual capacity of production - Held that:- Provisions of Rule 96(ZP) of the said Compounded Levy Rules were omitted from this Statute Books with effect from 01.03.2001 and Section 3 A of the Act was omitted w.e.f. 11.05.2001, without any saving clause. The Hon’ble Gujarat High Court in the case of Krishna Processors vs. Union of India reported in [2012 (11) TMI 954 - GUJARAT HIGH COURT] has held that after the omission of the said Rules, proceedings cannot be continued under the omitted Rules inasmuch as there was no saving clause. In a recent decision, the Tribunal in the case of Shri Surinder Steel Rolling Mill vide [2014 (7) TMI 699 - CESTAT NEW DELHI], has taken note of the said decision of the Hon’ble Gujarat High Court in the case of Krishna Processors, as also other decisions of the Hon’ble Supreme Court, and has come to a finding that the adjudication order passed subsequent to 01.03.2001, even where the proceedings were initiated prior to the said date, cannot be sustained. Provisions of Rule 96 (ZP), of the Annual Capacity Determination Rules have been held to be ultra vires by the Hon’ble High Court of Punjab and Haryana in the case of Bansal Alloys and Metals Pvt. Ltd. vs. Union of India reported in [2010 (11) TMI 83 - PUNJAB & HARYANA HIGH COURT] as also by the Hon’ble High Court of Himachal Pradesh in the case of Shubh Timb Steel Ltd. Vs. Union of India reported in [2012 (9) TMI 458 - HIMACHAL PRADESH HIGH COURT] As such, no penalty can be imposed under the said Rules. Otherwise also we find that the original dispute related to Annual Determination of Annual Production Capacity which culminated against the assessees by the order of the Hon’ble Supreme Court. In between, the Tribunals orders as also of the Hon’ble High Courts orders were in favour of the assessees. The said fact reflects that this is a case of bonafide interpretation of the provisions of law and the element of any malafide is missing, in which case imposition of penalty cannot be called for. Imposition of interest – Held that:- as per the declaration of law by the Hon’ble Delhi High Court in the case of Hindustan Insecticides Ltd. vs. Commissioner of Central Excise LTU, [2013 (8) TMI 225 - DELHI HIGH COURT], the Revenue is expected to issue show cause notice within the period of limitation, prescribed under the provisions of Section 11A of the Central Excise Act. The interest does not arise as an automatic appendix to the duty demand. Inasmuch as in the present case, neither show cause notice nor the demand for interest has been made within the limitation period, we find no justification for confirmation of interest. – Decided in favour of assesse.
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