2010 (4) TMI 483 - AT - Central Excise

Tribunal overturns penalties, cites legal principles. Appellant's challenge upheld.

The Tribunal allowed the appeal, setting aside the penalties imposed on the appellant for delayed payment of duty under Rule 96ZP(3) of the Central Excise ... Penalty - The appellant is manufacturer of hot rolled steel products and opted working under compounded levy scheme. Penalty has been imposed under Rule 96ZP(3) of Central Excise Rules, 1944 for delayed payment. Held that - no dispute that Rule 96ZP(3) introduced on 1.05.1998 penalty not imposable. For period prior to that. Issues:Penalty imposed for delayed payment of duty under Rule 96ZP(3) of Central Excise Rules, 1944 prior to its introduction on 1-5-98. Jurisdiction to raise the issue of applicability of the rule at the 3rd appellate stage.Analysis:The case involved the imposition of a penalty of Rs. 85,377/- on the appellant for delayed payment of duty under Rule 96ZP(3) of Central Excise Rules, 1944. The appellant, a manufacturer of hot rolled steel products, argued that the penal clause in Rule 96ZP(3) did not exist before 1-5-98. The appellant contended that the issue of jurisdiction could be raised at any time, citing legal precedents. The Tribunal considered three decisions cited by the appellant, including a Bombay High Court decision in the case of Inventors Industrial Corporation Ltd. v. CIT, to determine the applicability of the rule in the present case.The Tribunal acknowledged that Rule 96ZP(3) was introduced on 1-5-98, making the penalty inapplicable for delayed payments before that date. The key issue to be determined was whether the issue of jurisdiction or the applicability of the rule could be raised at the 3rd appellate stage. The Tribunal examined the legal precedents cited by the appellant, which highlighted the importance of jurisdictional points that could not be waived and the authority's power to initiate reassessment proceedings. Based on the legal principles outlined in the decisions, the Tribunal concluded that the appellants were entitled to raise the issue of the penalty's imposition under Rule 96ZP(3) and held that the penalty was not applicable to the appellant.Consequently, the Tribunal allowed the appeal by setting aside the penalties imposed on the appellant for delayed payment of duty. The judgment emphasized the significance of jurisdictional issues and the right of the appellant to challenge the imposition of penalties based on the timing of the introduction of Rule 96ZP(3). The decision underscored the importance of legal principles in determining the applicability of penalties under specific rules and the right of parties to raise jurisdictional issues at different stages of the appellate process.