2003 (10) TMI 178 - AT - Central Excise

Summary

Issues: Imposition of penalty under Rule 96ZO/ZP of the Central Excise Rules, 1944 on M/s. Sada Shiv Castings Ltd. & M/s. Chandigarh Ispat Ltd.

Analysis:
1. The Revenue sought penalty imposition on both Respondents for failing to pay Central Excise duty under Section 3A of the Central Excise Act. The Dy. Commissioner had initially imposed penalties, which were later set aside by the Commissioner (Appeals) citing confusion and ongoing litigation as reasons for the delay in duty payment.

2. The learned SDR argued that mens rea is not necessary for penalty imposition under Rule 96ZO/96ZP, emphasizing that non-discharge of duty on due dates warrants penalties. On the contrary, the Respondents' counsel contended that duty payment delay was due to High Court litigation, and once clarity was achieved, they promptly paid the duty along with interest, negating the need for penalties.

3. The Tribunal acknowledged the legal requirement to discharge duty liability before removing excisable goods from the manufacturing site. It was clarified that the Respondents were not involved in the referenced Court cases nor were there any stay orders on duty payment. As the goods were cleared without paying duty on time, penalties under Rule 96ZO/96ZP were deemed applicable.

4. However, considering that the Respondents settled their duty liability promptly after the stay orders were lifted for other parties, the Tribunal exercised discretion and imposed a reduced penalty of Rs. 20,000/- on each Respondent to serve the interests of justice. Consequently, the appeals were resolved with this decision.