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of <h1>Court modifies order, sets aside excessive penalties, allows appeal for penalties up to Rs. 10,000.</h1> <h3>M/s. Mandovi Ispat Pvt. Ltd., Versus Union of India, Through its Secretary, Ministry of Finance, Department of Revenue, Commissioner of Central GST and Customs Goa. Panaji</h3> M/s. Mandovi Ispat Pvt. Ltd., Versus Union of India, Through its Secretary, Ministry of Finance, Department of Revenue, Commissioner of Central GST and ... Issues:Challenge to order dated 27.02.2018 by Commissioner (Appeals), Central GST and Customs, Goa. Preliminary objection to maintainability of the petition. Consideration of annual capacity of production based on actual power supply. Imposition of interest and penalty under Rule 96ZO(3) of the Central Excise Rules, 1944. Validity of interest and penalty provisions under Rules 96ZO, 96ZP, and 96ZQ of the Central Excise Rules, 1944.Analysis:The petitioner challenged the order dated 27.02.2018 by the Commissioner (Appeals), Central GST and Customs, Goa, upholding the demand, interest, and penalties imposed. The respondent raised a preliminary objection regarding the maintainability of the petition, suggesting the petitioner should pursue an appeal to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) as per the impugned order. The petitioner contended that the determination of annual production capacity should consider actual power supply interruptions, not just sanctioned power supply. This contention was not adequately addressed in the impugned order, despite being crucial and previously highlighted in a writ petition. The court advised the petitioner to appeal to CESTAT for this issue.The petitioner further argued that the interest and penalty imposed were invalid, citing the Supreme Court's ruling in Shree Bhagwati Steel Rolling Mills case. The court upheld this argument, declaring the provisions of Rule 96ZO(3) of the Central Excise Rules, 1944, along with other related rules, as ultra vires and excessive. The court referenced specific observations from the Supreme Court's judgment, emphasizing the limitations on penalty amounts set by the Central Excise Act and the arbitrary nature of the impugned rules. Consequently, the court found the imposition of interest and penalty exceeding Rs. 10,000 to be unjustified and beyond jurisdiction.The court concluded that the impugned orders were modified to set aside the interest and penalty exceeding Rs. 10,000, in line with the Supreme Court's ruling. However, the court clarified that it did not assess the appropriateness of imposing a penalty up to Rs. 10,000. The petitioner was granted the liberty to challenge the penalty amount within Rs. 10,000 through an appeal if desired. The rest of the issues in the impugned order were left undisturbed, with the petitioner advised to pursue an appeal to CESTAT for further grievances. The rule was made partly absolute with no costs awarded in the present case.
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