TaxTMI 
TaxTMI 
2002 (5) TMI 379
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the facts are that the Appellant, a Department of Government of India, manufacture Diesel Electric Locomotives mainly for use of Indian Railways, which are exempted from payment of Central Excise duty under Notification No. 197/87-C.E., dated 28-8-87. The Collector, Central Excise, under the impugned order confirmed the demand of duty amounting to Rs. 3,75,61,598/- and imposed a penalty of Rs. 75 lakhs on the ground that Diesel Electric Generating Sets/Power Packs emerged as intermediate Products, during the process of manufacture of Diesel Locomotives and which were classifiable under Heading 85.02 of the Schedule to the Central Excise Tariff Act. The matter was referred to the Committee on Disputes which in its meeting held on 9-8-2001 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es where the breach flows from the bona fide belief that the offender is not liable to act in the manner prescribed by the statute. Reliance has also been placed on the following decisions - (i) Akbar Badruddin Jiwani v. Collector of Customs - 1990 (47) E.L.T. 161 (S.C.) (ii) Topaz Commerce Ltd. v. CCE - 1990 (47) E.L.T. 100 (T) (iii) S.P. Kumaria & Sons v. CCE - 1985 (22) E.L.T. 142 (T) Wherein it was held that if there was no intention to evade payment of duty, the imposition of penalty was not justified (iv) J.B. Shah v. Collector of Customs - 1991 (55) E.L.T. 333 (Cal.) 4. Finally, the learned Advocate referred to Ministry of Fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of penalty, in the case adjudicated upon in that matter, was imperative. He, further, mentioned that the Supreme Court also observed that "We have noticed that Patna High Court while interpreting Section 325 IPC held that imposition of penalty was not mandatory which again we have said is not correct view"; that the Apex Court also held that "It is difficult to accept the argument of the Appellant that levy of penalty is discretionary. It is only the amount of penalty which is discretionary." He, therefore, contended that imposition of penalty is must and as the amount of duty not paid is more than Rs. 3.75 crores, imposition of penalty of Rs. 75 lakhs is reasonable. 6. We have considered the submissions of both the sides. As p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the provisions of Rule 173Q with Section 271 of the Income Tax Act, 1961 prior to its amendment in 1988 and observed that under provisions of Section 271 of the Income Tax Act there is a discretion with the assessing Authority whether to impose any penalty or not and if the assessing Authority finds that it is a case for imposition of penalty then it has no discretion in the matter and the certain amount of penalty depending on the facts and circumstances of each case has to be imposed subject to the maximum limit mentioned in the section. We are thus of the view that penalty is imposable on the Appellant as the impugned goods were removed without payment of duty. However, we are also of the view that penalty imposed is highly excessive in....