2013 (1) TMI 248

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....vocate, for the Appellant. Shri R.K. Verma, AR, for the Respondent. [Order per : Rakesh Kumar, Member (T) (Oral)]. - The appellant manufactures ingots and billets chargeable to central excise duty. During the period of dispute they were paying duty under compounded levy scheme under Rule 96 ZO(3). The appellant during the period of dispute did not discharge the duty liability by the due d....

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....enged. The vires of this Rule was challenged before Hon'ble Punjab & Haryana High Court and the Hon'ble High Court in the case of Bansal Alloys & Metals Pvt. Ltd. v. UOI - 2010 (260) E.L.T. 343 (P & H) holding this rule to be ultra vires observed that adjudicating authority have discretion to impose lower penalty in the case of failure of the assessee to discharge duty liability by due date. The s....

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....elying upon the judgment of the Supreme Court in the matter of Dharamendra Textile Processors (supra) has held that under Rule 96ZO(3), the adjudicating authority has no discretion in reducing the penalty and the penalty must be imposed equal to the duty determined under Section 11AC of the Central Excise Act, 1944. 5. We have considered the rival submissions. As regards the judgment relie....

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....r mandatory minimum penalty without any men rea and without any element of discretion is excessive and unreasonable restriction on fundamental rights is arbitrary. Hon'ble High Court further observed that, moreover, exercise of such power by way of subordinate legislation is not permissible when rule making authority for levying penalty is limited to default "with intent to evade duty". The afores....