2017 (4) TMI 641 - AT - Central Excise

Appellate Tribunal Upholds Penalty Levy Decision, Citing Supreme Court Ruling

Commissioner of C. Ex. & S. Tax, Ahmedabad-I Versus M/s Maradia Steel Ltd.

The Appellate Tribunal upheld the impugned order, rejecting the Revenue's appeal concerning the levy of penalty under Rule 96ZQ of the Central Excise ... Penalty u/r 96ZQ of erstwhile CER, 1944 - short payment of duty - demands were confirmed with interest, but no penalty was imposed on the Respondent by the Adjudicating Authority - Held that: - the issue of levy of penalty u/r 96ZQ of erstwhile CER, 1944 is no more res integra. The Hon'ble Supreme Court in the case of Shree Bhagwati Steel Rolling Mills Vs CCE [2015 (11) TMI 1172 - SUPREME COURT], has held that the interest and penalty provisions under the Rules 96ZO, ZP, and ZQ of the CER, 1994 are invalid - appeal rejected - decided against Revenue. Issues: Levy of penalty under Rule 96ZQ of Central Excise Rules, 1944Analysis:The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved the issue of the levy of penalty under Rule 96ZQ of the erstwhile Central Excise Rules, 1944. The Respondent, engaged in the manufacture of Iron and steel products, had short paid duty during the relevant period. Demand notices were issued for recovery of unpaid duty and proposal for penalty. Although demands were confirmed with interest, no penalty was imposed by the Adjudicating Authority. The Revenue appealed against the order before the Commissioner (Appeals), who rejected the appeal. The Appellate Tribunal noted that the issue of penalty under Rule 96ZQ had been settled by the Hon'ble Supreme Court in the case of Shree Bhagwati Steel Rolling Mills Vs CCE. The Supreme Court had declared the interest and penalty provisions under Rules 96ZO, ZP, and ZQ of the Central Excise Rules, 1994 as invalid. Consequently, the Appellate Tribunal upheld the impugned order, stating that the Revenue's appeal lacked merit and was accordingly rejected.