TaxTMI 
TaxTMI 
2009 (12) TMI 173
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....O (3) (ii) is not inflexible and in all cases it is not necessary that penalty equivalent to the amount of duty must be imposed. This Court also opined that the intention to evade duty must be read in the aforesaid rule and in the absence of any finding concerning intention to evade the duty, no penalty could be imposed or even penalty lesser than the amount equivalent to the amount of duty could be imposed. 2. The matter was taken to Hon'ble the Supreme Court by the appellant-revenue and the view taken by this Court has not been accepted by Hon'ble the Supreme Court. The orders have been quashed and the appeals have been remitted back for decision afresh in the light of the judgment of the Supreme Court rendered in the case of Union of India and others v. Dharamendra Textiles Processors [2008 (231) E.L.T. 3 (S.C.) = (2008) 306 ITR 277 (S.C.)]. The aforesaid view taken in Dharamendra Textiles Processors' case (supra) has been further explained and clarified by Hon'ble the Supreme Court itself in the case of Union of India v. Rajasthan Spinning & Weaving Mills - 2009 (238) E.L.T. 3 (S.C.). Accordingly, we proceed to notice the issue and decide the same in the light of the judgments....
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....and calculation payable under Sub Rule (1) & (2). This was known as 'Compounded Levy Scheme'. A notification in that regard was issued on 1-8-1997. The notification provided that if the factory remains closed for not less than seven days then the assessee was to be entitled of abatement of duty in terms of Rule 96ZO (ii) of the Rules. 5. The dealer was required to pay proportionate amount of duty worked out on the basis @ Rs.5,00,000/- per month for 3 MT furnace under the Rule 96ZO (3). As per sub-rule (2) of Rule 96ZO of the Rules read with sub-section 3 of Section 3A of the Act, a provision has been made for abatement of duty in case a factory has remained closed for minimum period of 7 days continuously. The dealer claimed benefit of seven abatement under these provisions, which were decided by the Commissioner, Central Excise, Chandigarh, vide order dated 21-3-2000. The following table sums up the decision accepting and rejecting the claims are as under:- Sr. No. Period for which claim filed Period of which claim sanctioned Period for which claim rejected/disallowed 1 10-11-1997 to 17-11-1997 10-11-1997 to 17-11-1997 - 2 2-12-1997 to 9-12-1997 2-12-1997 to 9-12-199....
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....m 12-4-1998 to 30-4-1998 as the dealer had fulfilled the requirement of the provisions of Rule 96ZO(2) and his factory remained closed as a whole because only one service/furnace was installed during this period. The total period worked out is 90 days. The Commissioner also examined in detail the amount of duty which has remained unpaid and assessed the same to be Rs.8,38,977/-. Accordingly, the Commissioner ordered the dealer to pay the aforesaid amount under Rule 96ZO(3) of the Rules. 10. With regard to imposition of penalty under Rule 96ZO(3)(ii), the Commissioner has held that the dealer had failed to pay a part of the arrears even after lapse of more than three years and its conduct was devoid of any justification. Referring to the provisions of Clause (ii) of Rule 96ZO(3). the Commissioner held that the manufacturer had failed to pay whole of the amount by the end of the relevant month. The dealer was under obligation to pay penalty equal to the outstanding amount of duty or Rs.5,000/- whichever is higher. Therefore, the Commissioner ordered imposition of penalty to the tune of Rs.8,38,977/- which amount was equivalent to the amount of duty. The Commissioner also confirmed t....
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....ling aggrieved by the aforesaid adjudication of the Tribunal, the revenue has approached this Court by claiming that the following questions of law would arise for determination of this Court:- (i) Whether intimation of the date of closure of the furnace sent after three days due to intervening holidays can he considered as proper when the Trade Notice issued in this regard clearly provides to send the intimations in such cases through post/telegram? (ii) Whether penalty imposed under Rule 96ZO(3)(ii) upon a manufacturer of non-alloy steel ingots/billets falling under sub heading Nos. 7206.90 and 7207.90 of the Schedule of the Central Excise Tariff Act, 1985 (5 of 1986) and who opted to pay duty under Section 3A of the Central Excise Act, 1944 read with Induction Furnace Annual Capacity Determination Rules, 1997, but fails to pay the whole of the amount payable for any month by the 15th day or the last day of such month, as the case may be, is mandatory or discretionary in nature? (iii) Whether mandatory equal penalty imposed under Rule 96ZO 3)(ii) can be reduced? 12. On behalf of the revenue, Sarvshri Sanjiv Kaushik, Gurpreet Singh and Puneet Bassi, Advocates have vehemently a....
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....jeet Bhadau, Advocate, and Mr. R. Kartikeya, Advocate, on behalf of the dealers-respondents have vehemently argued that every penal action has to precede by a finding of dishonest intention impregnated with fraud and misrepresentation. According to learned counsel, no penalty could be imposed in cases where the abatement claims made by the dealer were binding especially when such claims have been found to be sustainable to a large extent. They have canvassed that the non-payment of duty cannot be imputed to any mala fide intention as the delay has occurred on account of bona fide belief which is based on pending abatement claims. They have also urged that the judgment of Hon'ble the Supreme Court in Rajasthan Spinning & Weaving Mills's case (supra) has clarified and explained its earlier judgment in Dharamendra Textiles Processors' case (supra) by observing that unless all the conditions specified under Section 11AC are fulfilled no penalty could be imposed. 15. In respect of question No. 1, it has been argued by the learned counsel for the dealers-respondent that there was no possibility of receiving intimation on account of holidays which was in fact sent on 24-1-1998. According....