TMI Blog2016 (10) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... COURT] where it was held that when contrasted with the provisions of the Central Excise Act itself, the penalty provisions contained in Rules 96ZO, 96ZP and 96ZQ are both arbitrary and excessive. A penalty can only be levied by authority of statutory law, and Section 37 of the Act, as has been extracted above does not expressly authorise the Government to levy penalty higher than ₹ 5,000/-. Insofar as they impose a mandatory penalty equivalent to the amount of duty on the ground that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act. The sole question of law in this appeal is answered against the department and in favor of the assessee - appeal dismissed. - Central Excise Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these provisions are violative of Article 14, 19(1)(g) and are ultra vires the Central Excise Act. Paragraph Nos.35, 36, 37, 38 and 39 of the aforesaid judgment are being reproduced hereunder:- 35. However, insofar the reasoning of the High Court is concerned on the aspects stated hereinabove, we find that on all three counts it is unexceptionable. First and foremost, a delay of even one day would straightaway, without more, attract a penalty of an equivalent amount of duty, which may be in crores of rupees. It is clear that as has been held by this Court, penalty imposable under the aforesaid three Rules is inflexible and mandatory in nature. The High Court is, therefore, correct in saying that an Assessee who pays the delaye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fundamental rights of the citizens affected thereby and the larger public interest sought to be ensured in the light of the object sought to be achieved, the necessity to restrict the citizen's freedom, the inherent pernicious nature of the act prohibited or its capacity or tendency to be harmful to the general public, the possibility of achieving the object by imposing a less drastic restraint, and in the absence of exceptional situations such as the prevalence of a state of emergency-national or local-or the necessity to maintain essential supplies, or the necessity to stop activities inherently dangerous, the existence of a machinery to satisfy the administrative authority that no case for imposing the restriction is made out or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t having applied for the registration required Under Section 6, or (d) contravenes the provisions of any such rule with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the manufacturer, producer or licensee shall be liable to a penalty not exceeding the duty leviable on such goods or ten thousand rupees, whichever is greater; 38. Under Section 37(3), the statute itself provides in all cases where no other penalty is provided by the Act that a penalty not exceeding ₹ 5,000/- alone can be levied. Sub-section(4) is even more telling. Even in cases where there is a clandestine removal of excisable goods, and cases where the Assessee intends to evade payment of duty, the Assessee is lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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