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TMI Blog2003 (11) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... unt realised through debit notes. The collector, by his order dated 17th November, 1987, confirmed the levy of duty, amounting to Rs. 1,19,453,59. The Collector held that 35 bales of Fabric of Sort Nos. 1200 and 1300 are liable to be confiscated, but since the goods had already been released, he appropriated a sum of Rs. 10,000/- towards the value of goods. He also imposed the penalty of Rs. 50,000/-. Aggrieved, the respondents preferred appeals before the Central Excise and Gold (Control) Appellate Tribunal. 3.The Tribunal relying upon the decision in the case of Pioneer Silk Mills Pvt. Ltd. v. Union of India, reported in 1995 (80) E.L.T. 507 (Del.), allowed the appeals, holding that the provisions of Central Excise Act and the Rules made thereunder, so far as they relate to confiscation cannot be made applicable for the breach of provisions of the Act. It is against the said judgment and order of the Tribunal, the appellant is in appeal before us. 4.Mr. S.R. Bhat, learned Counsel appearing for the appellant, urged that the view taken by the Tribunal in allowing the appeals was erroneous inasmuch as it is contrary to the decisions in the case of M/s. Khemka & Co. (Agencies) Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the amended provisions with the unamended ones would clearly demonstrate that the words 'offences and penalties' have consciously been inserted therein. The cause of action for imposing the penalty and directions of confiscation arose in the present case in the year 1987. The amended Act, therefore, has no application to the facts of this case. 9.The Gujarat High Court in Ashok Fashion Ltd. (supra) although took notice of the fact that the cause of action therein arose in the year 1993, but inadvertently or otherwise noticed the amended provisions of sub-section (3) of Section 3 of the Act. It furthermore although noticed the decision of M/s. Khemka & Co. (Agencies) Pvt. Ltd. (supra), as would appear from the discussion made hereinafter, but chose to follow the minority decision and not the majority one. 10.In M/s. Khemka & Co. (Agencies) Pvt. Ltd. (supra), this Court categorically laid down Paras 25 and 26, which runs as under : Penalty is not merely sanction. It is"25. not merely adjunct to assessment. It is not merely consequential to assessment. It is not merely machinery. Penalty is in addition to tax and is a liability under the Act. Reference may be made to Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Parliament has exclusive power to legislate on a topic covered by it? As this question was not argued before us I would only say that the correct canon of construction to apply in such a case is that we should so interpret Section 9(2) of the Central Act, if possible, that no part of it may conceivably be invalid for excessive delegation. The well known maxim applicable in such cases is : ut res magis valeat quam pereat. 38.It is evident from Section 16(4) of the Bombay Act of 1953 that there is a particular percentage of the amount of tax levied which is prescribed as penalty to be paid as an "addition to the amount of tax for every month after the expiry of the prescribed period of default". In other words it is a liability in the nature of an additional or penal tax. Section 13(3)(b) of the Mysore Act also makes it clear that, on an application made to the Magistrate, such as the one made in the case which has come up before us from Mysore, the penalty may be equated with a fine. Section 63 of the Bombay Act of 1959 speaks of certain "offences and penalties". Indeed, Chapter 8 of that Act is itself headed as "Offences and Penalties". 12.Mathew, J., however, in his dissenting o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the additional duty of excise in the same manner and extent to which they apply in relation to the levy and collection of the duties of excise on the goods specified in column 3 of the First Schedule referred to in Section 3(1) of the Additional Duties Act. This is so stated, because, all the goods specified in the said First Schedule were also subjected to duties of excise at the rates set forth in the Schedule to the Central Excise Tariff of 1985, under Section 3 of Central Excise Act, 1944, which provision also lays down that such duties of excise shall be 'levied and collected' in such manner as may be prescribed." 15.The decision in Ashok Fashion (supra) was, therefore, rendered on total misapplication of the law laid down by the Constitution Bench decision by M/s. Khemka & Co. (Agencies) Pvt. Ltd. (supra). 16.We are bound by the Constitution Bench decision in M/s. Khemka & Co. (Agencies) Pvt. Ltd. (supra). 17.The Delhi High Court also in Pioneer Silk Mills Pvt. Ltd. (supra), upon noticing M/s. Khemka & Co. (Agencies) Pvt. Ltd. (supra) and various other decisions clearly held : When penalty is additional tax, constitutional mandate requires a clear authority of law for i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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