2000 (12) TMI 157 - AT - Central Excise

Tribunal reduces penalty for non-payment due to financial hardship. Penalty discretion vs. imposition.

BIHAR ISPAT UDYOG Versus COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR

BIHAR ISPAT UDYOG Versus COMMISSIONER OF CENTRAL EXCISE, JAMSHEDPUR - 2001 (130) E.L.T. 231 (Tri. - Kolkata) Issues: Imposition of personal penalty under Rule 96ZP(3) for non-payment of duty by the appellants.Analysis:1. The appellants contested the imposition of a personal penalty of Rs. 2,69,345.81 under Rule 96ZP(3) for failing to pay duty by the specified date each month. They did not dispute the demand against them but argued that the adjudicating authority imposed a 100% penalty without considering their financial difficulties at the time, citing a Supreme Court decision and a Tribunal ruling to support their stance.2. The Revenue representative countered, stating there was no evidence of the appellants' inability to pay the duty on time, implying that the delayed payments reflected poorly on their conduct and justified the penalty imposed.3. The Tribunal considered both parties' arguments.4. The Tribunal referred to a Supreme Court case involving Rule 173Q and Section 11AC, noting the similarity in language and the mandatory nature of penalty imposition under both provisions. The Court emphasized that while the amount of penalty is discretionary, the levy of penalty itself is not. It also referenced a previous decision regarding penalty discretion by the assessing authority.5. Applying the Supreme Court's interpretation to Rule 96ZP(3), the Tribunal concluded that the adjudicating authority had the discretion to determine the penalty amount, not mandating a 100% penalty, as the section sets the maximum penalty equal to the evaded duty. Citing another Tribunal decision, it clarified that the maximum limit specified is not mandatory in all cases.6. The appellants' financial hardship was considered, as they faced challenges meeting the duty deadline due to financial constraints. Despite paying the duty and interest later, they requested a penalty reduction based on their circumstances.7. Taking into account the appellants' plea and financial situation, the Tribunal reduced the penalty from around Rs. 2.61 lakhs to Rs. 1.50 lakhs, finding the reduced amount appropriate for the circumstances. The appeal was rejected except for the penalty modification, which was deemed necessary to serve the interests of justice.