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2016 (10) TMI 569 - AT - Central ExciseDifferential duty under the compounded levy scheme u/s 3 (a) of the Central Excise Act - iron and steel products manufactured in Hot Steel Rerolling Mills with effect from 01.09.1997 - constitutional validity of Rule 5 - the decision in the case of R.S. Industries (Rolling Mills) Vs Union of India [2016 (5) TMI 1277 - RAJASTHAN HIGH COURT] referred - Held that: - the issue of the case R.S. Industries (Rolling Mills) Vs Union of India is similar and the decision apply. Since the matter is pending before the Hon’ble Supreme Court for final determination, regarding the constitutional validity of Rule 5, of the Hot Re-rolling Mills Capacity Determination Rules 1997, the present appeals is disposed off by observing that the outcome of the pending appeals before the Apex Court would apply. Imposition of penalty and interest - Held that: - the decision in the case of Shri Bhagwati Steel Rolling Mills Vs CCE [2015 (11) TMI 1172 - SUPREME COURT] apply where it was held that a penalty can only be levied by authority of statutory law, and Section 37 of the Act, does not expressly authorize the Government to levy penalty higher than ₹ 5,000/-. This further shows that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make Rules 96ZO, 96ZP and 96ZQ without authority of law. The Rules of 96ZO, 96ZP and 96ZQ striked down insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Articles 14, 19(1)(g) and are ultra vires the Central Excise Act - imposition of penalty and interest not sustainable in law - appeal disposed off - decided against appellant.
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