TMI Blog2015 (10) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... law arises in this appeal - Decided against assessee. - CEA No. 31 of 2015 (O&M) - - - Dated:- 14-9-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr. Sukhdev Sharma, Adv JUDGMENT Ajay Kumar Mittal, J. 1. This appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (in short the Act ) against the order dated 21.8.2014 (Annexure A-2) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as the Tribunal ) claiming the following substantial questions of law:- i) Whether it was legally correct for the Hon'ble Tribunal to consider the challenge to the vires of Rule 5 of the Hot Re-rolling Steel Mills Annual Cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 96ZP of the Central Excise Rules, 1944 could be waived or reduced at the discretion of the adjudicating authority having regard to extent and circumstances of delay in payment of duty? v) Whether the provisions of Section 38A of the Central Excise Act, 1944 inserted vide Section 131 of the Finance Act, 2001 (Validation of the action taken has been provided by virtue of the Section 132 of the Finance Act, 2001) shall be applicable in respect of obligation and liabilities incurred under Rules 96ZO and 96ZP of the erstwhile Central Excise Rules, 1944 before the same were omitted, notwithstanding the omission of Section 3A w.e.f. 11.05.2001? 2. The assessee was working under the compounded levy scheme during September, 1997 to March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able under the third proviso to Rule 96ZP(3) of the Rules. Feeling aggrieved, the department filed an appeal before the Tribunal who vide order dated 21.8.2014 (Annexure A-2) dismissed the appeal in terms of judgment of this Court in Bansal Alloys Metals Pvt. Ltd. v. Union of India, 2010(260) ELT 343 (P H). Hence, the present appeal. 3. We have heard learned counsel for the appellant. 4. It is not disputed that the issue raised in this appeal stands concluded by the decision of this Court in CEA No. 49 of 2012 [M/s Jai Bharat Maruti Ltd. v. Commissioner of Central Excise Delhi-III, Vanijya Nikunj, Udyog Vihar, Phase-Gurgaon (Haryana)] decided on 12.9.2013 and CEA No. 39 of 2013 [Commissioner of Central Excise, Chandigarh-II v. M/s P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. For the above reasons, we hold that the impugned provision to the extent of providing for mandatory minimum penalty without any mens rea and without any element of discretion is excessive and unreasonable restriction on fundamental rights and is arbitrary. Moreover, exercise of such power by way of subordinate legislation is not permissible when rule making authority for levying penalty is limited to default with intent to evade duty . 17. The writ petitions of the assessees are allowed and impugned provisions in Rules 96(ZO), (ZP) and (ZQ) permitting minimum penalty for delay in payment, without any discretion and without having regard to extent and circumstances for delay are held to be ultravires the Act and the Constitution. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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