TMI Blog2008 (4) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... the person and the extent of evasion among other things will have to be taken into account in doing so. The amount mentioned in Rule 173Q(1) of the 1944 Rules or Rule 25(1) of the 2002 Rules is the maximum, and not the minimum. The amount shall not exceed the duty determined; if it is more than rupees five thousand, or rupees five thousand if the duty determined is less than rupees five thousand. It is needless to say that while exercising discretion in fixing the amount, the authorities are supposed to give due regard to the relevant factors. - Justice S.N. Jha, President, S/Shri M. Veeraiyan, Member (T) and P.K. Das, Member (J) [Order per : Justice S.N. Jha, President]. - This appeal has been referred to Larger Bench on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch decision in Bharat Petroleum Corporation Ltd. v. CCE, Cochin- 2005 (191) E.L.T. 1128 (Tri.-Bang.). We may mention here that in Bharat Petroleum Corporation Ltd. case there is no discussion as to whether the penalty prescribed under Rule 173Q is minimum or any discretion is left with the adjudicating authority to impose lesser penalty. From the judgment it does not appear that the point was even canvassed before the Bench. No doubt, at the end of the paragraph towards end of the judgment, there is observation that heavy penalty of Rs. 1,00,000/- applicable under Rule 173Q(1) for contravening Clause (a) is not called for, or sustained in this case, "the minimum penalty prescribed under Rule 173Q(1) of Rs. 5,000/- is only required to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued under these rules with intent to evade payment of duty, then all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or rupees ten thousand (now rupees two thousand), whichever is greater." 5. The first thing which strikes notice on a reading of the rule is that the provisions are "subject to the provisions of Section 11AC of the Act" i.e. Central Excise Act. Therefore, in order to construe the meaning and scope of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in exercise of rule making power conferred upon by the Statute cannot run counter to or at variance with the provisions of the Statute being a piece of subordinate legislation. Any provision in conflict with the statute, therefore, will have to be read down to that extent. 6. The second thing which strikes our attention on a close reading of the rule is that the words "not exceeding" occurring therein govern both alternative penalties. In other words, the penalty shall not exceed either the duty on excisable goods (in respect of which any contravention of the nature referred to in clauses (a), (b), (c) or (d) has been committed), or rupees five thousand, whichever is greater. Thus, where the duty determined against the person is more th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount lesser than Rs. 5,000/-. Therefore, there is no minimum amount of penalty prescribed under the said provision. It cannot be said that when three times of the value of excisable goods works out to be more than Rs. 5,000/- then in such cases Rs. 5,000/- should be treated as the minimum prescribed penalty. No such construction is warranted from the language of the said provision from which it is abundantly clear that it prescribes the maximum limit upto which the penalty can be imposed which maximum limit in no case be below Rs. 5,000/-. Whether the maximum is higher than Rs. 5,000/- or the maximum is to be taken as Rs. 5,000/-where the three times of the value of the excisable goods is below Rs. 5,000/- the discretion of the authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide relief that the offender is not liable to act in the manner prescribed by the Statute." 9. In State of Madhya Pradesh v. Bharat Heavy Electricals, 1998 (99) E.L.T. 33 (S.C.), the Supreme Court had occasion to consider a State enactment in terms of which the person was liable to pay penalty equal to ten times the amount of pre tax payable on the goods in case of contravention of the relevant provision. It was held that "the penalty of ten times the amount of entry tax stipulated therein is only the maximum amount which could be levied and the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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