TaxTMI 
TaxTMI 
2012 (9) TMI 458
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....ntical questions are involved in these cases. 2. Central Excise Appeal No. 3 of 2006 has been filed by the revenue. By means of this appeal, the revenue has challenged the order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), dated 14.09.2005, whereby the penalty was reduced to one lac. According to the Excise Tribunal, the minimum penalty should have been 100% of the excise duty leviable and reliance in this regard was placed on Rule 96ZO of the Central Excise Rules. 3. CWP No. 4531 of 2009 was filed by the assessee whereby the assessee has challenged the ultra vires of Rule 96ZO. Reliance on behalf of the assessee is placed on the judgment delivered by a Division bench of the Punjab and Haryana High Court ....
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....me contentions are raised before us. 4. Reference may be made to Section 37 of the Excise Act which empowers the Central Government to make rules and Rule 96ZO, which is under challenge in this Court: "Section 37: Power of Central Government to make rules - (1) to (3) xx xx xx xx xx (4) Notwithstanding anything contained in sub section (3) and without prejudice to the provisions of section 9, in making rules under this section, the Central Government may provide that if any manufacturer, producer or licensee of a warehouse - a) removes any excisable goods in contravention of the provisions of any such rule, or b) does not account for all such goods manufactured, produced or stored by him, or c) engages in the manufacture, ....
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.... paid by the 31st day of March, 1998; (b) the amount of duty already paid, together with on-account amount paid by the manufacturer, if any, during the period from the 1st day of September, 1997 to the 31st day of March, 1998, shall be adjusted towards the total amount of duty liability payable under clause (a); (c) if a manufacturer fails to pay the total amount of duty payable under clause (a) by the 31st day of March, 1998, he shall be liable to pay the outstanding amount (that is the amount of duty which has not been paid by the 31st day of March, 1998) along with interest at the rate of eighteen per cent per annum on such outstanding amount calculated for the period from the 1st day of April, 1998 till the date of actual payment ....
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....) a penalty equal to such outstanding amount of duty or five thousand rupees, whichever is greater. (l-A) If any manufacturer removes any of the nonalloy steel ingots and billets specified in sub-rule (1) without complying with the requirements of the provisions of that sub-rule, then all such goods shall be liable to confiscation and the manufacturer shall be liable to a penalty not exceeding three times the value of such goods, or five thousand rupees, whichever is greater. xxxx xx xxx (3) Notwithstanding anything contained elsewhere in these Rules, if a manufacturer having a total furnace capacity of 3 MT installed in his factory so desires, he may, from the first day of September, 1997 to the 31st day of March, 19....
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....whichever is greater. 6. The contention raised is that the Rule Making Authority cannot go beyond the Act and when the Act provides for requirement of mens rea inasmuch as intention must be there to evade the duty, the Rule could not dispense with such requirement. Reliance has been placed on the judgment of the Apex Court in State of TN and another versus P. Krishnamurthy and other, (2006) 4 SCC 517 and Bombay Dyeing & Manufacturing Company Limited (3) versus Bomany Environmental Action Group, AIR 2006 SC 1489. 7. this issue was discussed threadbare by a Division Bench of the Punjab and Haryana High Court in the judgment cited above wherein after discussing the entire law, the Court held as follows: 15. Applying the above principl....