TMI Blog2022 (2) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... ty based on extent of delay which sometimes exceeds the liability is grossly disproportionate and arbitrary penalty which is also an irrational levy automatically looses nexus achieving the object of correcting mischief sought to be preventive by the Legislation and therefore, renders itself unconstitutional. Also keeping in view that per day penalty at the rate of ₹ 200/- can be levied in terms of sub-clause (3) of section 77 of Central Excise Act and the SCN is silent about specifically invoking the said sub-clause (3), it is held that the grievance of the present appeal stands already covered by the decisions as discussed above. The issue, therefore, is no more res-integra. Imposition of penalty of ₹ 2,56,000/-+ ₹ 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,174/- was issued. However, subsequently, vide a corrigendum dated 17.12.2009 abatement at the rate of 67 % in terms of Notification No. 1 of 2006 was allowed and the demands proposed was reduced to ₹ 40,318/-. This amount got paid by the appellant. Subsequently, another Show Cause Notice dated 23.04.2013 for the period 2007-08 to 2011-12 was issued vide which a demand of ₹ 1,46,36,284/- was proposed. Three more Show Cause Notices were subsequently issued for the period 2010-11 and 2011-12 and the period 2013-14 and 2014-15. Details of these SCNs are tabled below:- S.No. SCN No./File No. Dated Period Involve Amount involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order No. 14/ST/DLH/2018 dated 1st February, 2018 remanded the matter for de-novo fresh adjudication, giving another opportunity to the appellant to get its claim for abatement and reverse charge verified and to resubmit the verified documents to be considered afresh by the adjudicating authority. 2. After the order of Commissioner (Appeals) dated 01.02.2018 appellant filed the refund claim on 08.01.2020 for the amount of pre-deposit i.e. for ₹ 14,40,000/-. The said refund claim has been decided vide Order-in-Original No. R-01/ 2020-2021 dated 29.06.2020 vide which the refund of ₹ 13,03,723/- was sanctioned after deducting the amount of penalty (₹ 2,56,000 + 5000 + 40318) and that of interest (₹ 18381/-) from S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest and penalty but had not quantified the amount thereof. The order under challenge has for the first time quantified the interest and the penalty. The quantification is alleged to be disproportionate to the demand. For the said reason the order under challenge is prayed to be set aside and appeal is prayed to be allowed. 6. While rebutting these submissions, ld. DR has relied upon the order. It has mentioned that the Section 77 of Finance Act, 1994 permits the imposition of penalty at the rate of ₹ 200/- per month. The Original Adjudicating Authority in Table II as mentioned in Order-in-Original dated 29 June, 2020 has calculated the penalty accordingly for a period of 1280 days for ₹ 2,56,000/-. Hence, there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled as State of Haryana vs. Sangla reported in 1993 (4) SCC 390 has held that the object in purpose for which the penalty is levied is that the penalty should be sufficient to remedy the mischief sought to be prevented and once it exceeds the limits of a corrective deterrent, sufficient to dissuade the violator, it assumes the character of disproportionate penalty the Hon ble Apex Court in the case of Hindustan Steel Limited (Supra) has also held that not providing for an opportunity of hearing to the assessee before levying maximum penalty, the act by itself is in violation of the principles of natural justice. 8. Keeping in view the said decisions, also keeping in view that per day penalty at the rate of ₹ 200/- can be levied in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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