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2018 (2) TMI 920

Delayed payment of central excise duty under Section 3A of the Central Excise Act, 1944 - Demand of Interest and penalty - Rules 96ZO, 96 ZP and 96 ZQ of the Central Excise Rules, 1994 - Annual Capacity of Production Scheme - respondent is independent processor of textile fabrics - Held that: - In Shree Bhagwati Steel Rolling Mills Vs. Commissioner of Central Excise, [2015 (11) TMI 1172 - SUPREME COURT], the Hon'ble Supreme Court has declared Rule 96 ZQ(5)(ii) of the Central Excise Rules, 1944, as ultra vires of the Act and therefore, the second substantial question of law, is also answered against the revenue. - Appeal dismissed - decided against Revenue. - CMA No. 100 of 2018 - Dated:- 24-1-2018 - S. Manikumar And V. Bhavani Subbaroyan, JJ. For the Appellant : Mr. A. P. Srinivas JUDGMENT ( Order of the Court was delivered by S. Manikumar, J ) Instant Civil Miscellaneous Appeal is filed against the final order made in No.40263 of 2015 dated 24.02.2015, on the file of CESTAT, Madras by which the tribunal, dismissed the appeal filed by the revenue and remanded the matter for reconsideration, by the adjudicating authority. 2. Facts relating to the appeal are that M/s.United Bleac .....

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, Coimbatore has issued 4 Show Cause Notices to the respondent, as detailed below: SCN No. and date Period Duty Demanded [Rs.] C.No.V/52-54/15/95/99-Cx. Adj dated 29.06.1999 16.12.1998 to 31.05.1999 56,99,722/- C.No.V/16/489/99 UCD dated 15.12.1999 01.06.1999 to 31.10.1999 26,02,850/- C.No.V/16/120/2000-UCD dated 02.05.2000 01.11.1999 to 29.02.2000 13,85,080/- C.No.V/52/15/118/2000-Cx. Adj dated 18.11.2000 01.03.2000 to 31.05.2000 18,00,000/- 6. [i]After due process of law, based on the original ACP fixed, the Commissioner of Central Excise, vide O-I-O Sl.No.35/2001 dated 19.09.2001 confirmed the demand of duty of ₹ 1,14,87,652/-, for the period from 16.12.1998 to 31.05.2000, under Rule 96ZQ[3], along with appropriate interest, under rule 96ZQ[5][i] and imposed penalty, under rule 96ZQ[5][ii]. Aggrieved by the order the respondent filed an appeal with CESTAT, Madras, [Appeal No.E/1213/01/MAS] [ii] ACP was revised by the Commissioner vide C.No.VI/16/47/2004-Cx.Pol. dt.21.04.2004, for the financial years 1998-99 and 1999-2000 [upto Feb, 2000]. Aggrieved by the same, the respondent has filed an appeal before CESTAT, Madras, on 13.10.2004 [No.E/986/2004] [iii] Contending inter al .....

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ed out, to arrive at the penalty liability, is not legal and proper, and hence, instant appeal is filed under Section 35G of the Central Excise Act, 1944, on the following substantial questions of law. "1. Whether the impugned order of the Hon'ble Tribunal was legally correct in remanding the Order-In-Original no.02/2007 dated 26.02.2007 for redetermination of duty liability when such determination of duty liability has already become final and conclusive vide Hon'ble Tribunal's final order no.499 to 501/2006 dt. 12.06.2006. 2. Whether the impugned order of the Hon'ble Tribunal is legally correct when the issue to be decided was penalty of ₹ 73,12,645/- under Rule 96 ZQ (5)(ii) of the Central Excise Rules, 1944 and not determination of duty liability." 10. To substantiate the above substantial questions of law, Mr.A.P.Srinivas, learned senior standing counsel for Customs, Central Excise and Service Tax submitted that CESTAT, Madras, has passed the impugned order, disposing of a set of appeals by remanding the matter to the respective adjudicating authorities, giving directions as detailed below, (i) That the assessee should be given fair opportunity .....

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ons of the Tribunal's, vide de-nova order dated 12.06.2006, has been followed, in letter and spirit. Therefore, the impugned order of the Tribunal, once again, remanding the matter for another, de-nova adjudication, is not proper. 14. He further submitted that Sub-rule (5) of Rule 96 ZQ of the said rules, make it obligatory to pay interest, in case of delayed payment of duty, as well as to pay the penalty. The two sub-clauses of the said Rule 5 of Rule 96-ZQ would clearly disclose that, liability under the both the clauses, to pay penalty, were neither, alternative nor optional, nor it leaves any discretion, either to the authority or to the assessee. As regards penalty is concerned, prior to 28th February, 1999, it was restricted to equal to an amount of duty, outstanding at the end of the month. However, w.e.f. 28.02.1999, the expression, at the end of such month, has been deleted and that the same, has been quantified as equal to an amount of duty outstanding. According to the learned counsel for the appellant, the legislative intent, therefore, is very clear from the amendment to the said Rules is that, it is the discretion left to the authority to alter the amount of penal .....

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be relooked by concerned adjudicating authority, as a result of which both sides shall get reasonable opportunity to resolve their dispute at the gross root level. Added to this, ld. counsels appearing in different cases agreed that there shall be no challenge to leviability of duty under Section 3A of the Central Excise Act, 1944 in view of Apex Court judgment and decision of Madras High Court. But they prayed that appellants deserve full length of hearing before the learned adjudicating authority to argue on different aspects in addition to proper determination of liability wherever such issues are involved. It is also stated in the Bar that Rule 5 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997 being under challenge before the Hon'ble High Court of Madras in W.A.No.1620/2003 by M/s.Madras Steel Re-Rollers Vs. UOI, the outcome of that judgment be also applied by learned adjudicating authority while they complete readjudication following principles of natural justice the discretion of the Tribunal made by this order. 3. Revenue agreed to aforesaid prepositions. 4. In view of law laid down in aforesaid judgments and agreement of both sides to reduce .....

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on'ble High Court of Madras stating that writ application may be transmitted to the Apex Court. We are unable to express any opinion on such proposition in absence of any such memo before us." 19. On this day, attention of this Court was also invited to the order made in W.A.Nos.1620 & 1675 of 2003, dated 17.06.2015, by which a Hon'ble Division Bench of this Court in M/s.Madras Steel Re-Rollers Association, Chennai and another Vs. Union of India and another, dismissed the writ appeals. Order of the Hon'ble Division Bench is extracted hereunder. "Learned counsel for the respondents states that there is no transfer petition pending before the Honurable Supreme Court. On the other hand, a Division Bench of the Karnataka High Court in W.A.No.331 of 2006 and connected matters decided on 27.09.2013 has repelled the challenge to Rule 5 of Hot Rerolling Steel Mills Annual Capacity Determination (Amendment) Rules, 1997, has not made ultra vires and contrary to Section 3-A of the Central Excise Act, 1944, and thus learned counsel for the appellant states that the same deals with no scope to press the present appeals. 2. In view of the aforesaid submission, the writ .....

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