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TMI Blog2008 (6) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... e 96ZP(3) of the erstwhile Central Excise Rules, 1944 to reduce the quantum of penalties that was rightly imposed by the adjudicating authority and upheld by the lower appellate forum after due process of law and based on the findings that the respondents had defaulted in payment of duty? (2) Whether the Tribunal was right in placing reliance upon its own decision in the case of M/s. Sree Lakshmi Steel Re-rolling Mills without any reference to the decision of a Division Bench of High Court of Allahabad in the case of Pee Aar Steels Pvt. Ltd. [2004 (170) E.L.T. 406 (All)], which was prominently quoted by the Commissioner (Appeals) to uphold the penalty imposed by the adjudicating authority?" 2. Learned counsel appearing for the appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y were not goods of local origin." 8. The word penalty equal to ten times of the amount of entry tax has been interpreted by the Supreme Court. In paragraphs 12 and 13 of the above referred Judgment, the Supreme Court has held as follows :- "12. It is not necessary for us to decide whether the provision for levy of penalty equal to ten times the amount of entry tax would be confiscatory and, therefore, ultra vires since Mr. Sanghi, in fairness, submitted that the State treats it as the maximum limit and not fixed amount of penalty leaving no discretion for imposition of lesser penalty. This stand of the State itself concedes that the assessing authorities are not bound to levy fixed penalty equal to ten times the amount of entry tax whene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the penalty of Rs. 25,000/- would suffice the purpose of Rule 96ZO(3). We find-that the reasoning given for reduction of penalty is not extraneous. The Tribunal is having power to reduce the penalty, by taking into the overall situation of the case. The last limb of the provision which states "or five thousand rupees whichever is grater" is a point to the position that the penalty required to the outstanding amount of duty stipulated is only the maximum amount which could be levied and the authorities have discretion to levy lesser amount depending upon the facts and circumstances of each case. 10. In a comparable provisions of the section 125 of the Customs Act, which provides for redemption of fine in lieu of confiscation and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. Under Section 11-AC of the Central Excise Act, the manner in which the whole transaction went on makes it very clear that the appellant became liable to pay duty under the circumstances which warrant application of the provisions of Section 11-A (i) [sic 11-A (l) first provisio] and, therefore, we think if the authorities chose to impose penalty equivalent to duty payable by the appellant, we do not think, there is any justification for us to interfere with the same. The decisions adverted to by the learned counsel have different complexions and bearing. These cited cases arose in the circumstances where certain actions had been taken in bona fide belief or the parties were under bona fide doubt as to under what tariff item they had to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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