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M/s. Sakthi Industries Versus CCE, Chennai II

2015 (10) TMI 911 - CESTAT CHENNAI

Penalty under Rule 173GG of Central Excise Rules, 1944 - Mens Rea - Held that:- Without foundation in the original show cause notice to levy penalty under Rule 173GG, right to defense cannot be denied. No one can be held deterrently violating the pri .....

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is certainly to safeguard Revenue, but mens-rea is basic element to judge imposition of penalty to prevent disproportionality taking into the gravity of the breach committed into consideration. Blanket levy of penalty of ₹ 1,70,000/- is theref .....

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ing subordinate to legislation no scope is provided to that authority to prescribe any disproportionate penalty. This ground is alone enough to set aside the penalty imposed. - element of mens rea was also recognized by the Hon’ble Kerala High Court .....

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hri D.N. Panda, Judicial Member Shri M.Masilamani, Consultant : for the Appellant Shri B. Balamurugan, AC (AR) : for the Respondent ORDER: It is the submission on behalf of the appellant that show-cause notice was issued on 14.12.2000 proposing penal .....

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nsequence of the show cause notice extracted in the adjudication order dated 15.4.2011. It is also the submission of the appellant that it took 11 years for the adjudicating authority to adjudicate the matter from the date of show-cause notice as sta .....

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Rules, 1944 holding that there cannot be simultaneous penalty under Rule 173Q and 173GG. He has failed to show the reason why the penalty under Rule 173GG should be levied. He has also ignored the fact that there was no proposal in the show-cause not .....

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denied. No one can be held deterrently violating the principles of natural justice. The most interesting feature of this appeal is that there was disproportionate penalty of ₹ 1,70,000/- for the default of payment of duty of ₹ 7,235/-. It .....

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Blanket levy of penalty of ₹ 1,70,000/- is therefore considered to be disproportionate looking to the gravity of the matter since duty default was ₹ 7,235/-. The Hon ble High Court of Punjab & Haryana has held in para 15 of the judgm .....

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