TMI Blog2014 (4) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. Be that as it may, in view of the judgment of the Supreme Court [1965 (10) TMI 11 - SUPREME Court] that imposition of penalty in terms of Rule 96ZO is held to be mandatory - High Court while exercising powers under Section 35G of the Act, exercises such power as a creature of the statute and exercises such power within the statutory scheme and administers the statutory provisions and cannot travel beyond the statute. - No Illegality in the orders of the CESTAT and in the factual situation and in the light of the subsequent developments after the orders of the CESTAT in the year 2005, as a matter of fact, the substantial question of law really do not arise in the present cases for consideration of this Court. - Decided against Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates during the period from April, 1998 to September, 1998 and the duty amount as fixed by the Commissioner was required to be paid in two equal instalments. The first instalment latest by 15th of each month and the 2nd instalment by the last date of the said month. The verification of RT 12 returns for the months of April, 1998 to September, 1998 revealed that assessee has not paid duty due on the specified dates, but paid subsequently. On the above violation, Rule 96ZO of the Central Excise Rules, 1944 (as existing then) was invoked and assessee was directed to pay penalty of ₹ 4,99,666/- invoking Rule 96ZO(3), which mandates imposition of penalty equivalent to outstanding amount of duty or ₹ 5,000/- whichever is greater. On a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement of mens rea for the purpose of imposition of penalty under Rules 96ZO and 96ZQ and there is no discretion given to the adjudicating authority to reduce the penalty on consideration of the facts. Imposition of penalty has been held to be mandatory by the Hon ble Supreme Court as such, the judgment of the CESTAT is erroneous and requires to be set aside and the questions need to be answered in favour of the Department and against the assessee. 5. On the other hand, Sri S. Ravi, learned senior counsel appearing on behalf of the respondent would submit that the law laid down by the 2-Judge Bench of the Hon ble Supreme Court in Dharamendra Textile case (supra) is running contrary to a large number of earlier decisions of the Larger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed - 2013 (20) GSTR 581 (Uttarakhand) and the High Court of Himachal Pradesh in Shubh Timb Steel Limited v. Union of India - 2012 (286) E.L.T. 495 (H.P.). He would further submit that in the light of the law declared by the Constitutional Courts holding the rule to be ultra vires, the very demand of penalty equivalent to the duty amount even for a delayed payment of one day is totally unsustainable and would be totally unauthorized. He would also urge that this Court exercises the jurisdiction of the appellate court over the orders of the CESTAT and as an appellate court, it is strictly bound to apply the provisions of the Act and the Rules. He would further urge that there being no rule and Rules 96ZO, 96ZP and 96ZQ having been struck down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory provisions and cannot travel beyond the statute. In this connection, the judgment of the Hon ble Supreme Court in K.S. Venkataraman Co. (P) Ltd. v. State of Madras - AIR 1966 SC 1089 may be noticed, wherein at Paras 20 and 21 held as follows :- 20. The said machinery provisions cannot be construed in vacuum : they must be collated with the charging sections; that is to say, the Act provided for a machinery for deciding disputes that arise under the substantive provisions of the Act. To illustrate: suppose there is provision in the Act to the effect that the said Act does not apply to indivisible building contracts. Can the officer decide that the Act applies to such building contracts? Such a decision, if given, will not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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