2013 (1) TMI 442

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....-. 2. The respondent is engaged in manufacture of non alloy steel ingots falling under chapter sub-heading 7206.90 of the schedule to the Central Excise Tariff Act, 1985. The respondent was working under compounded levy scheme under Section 3A of the Central Excise Act, 1944. Under the scheme the respondent was required to pay a sum of duty amounting to Rs. 5.50 lacs in two equal instalments in a month. The first instalment of Rs. 2.75 lacs was required to be paid by 15th day of each month and second instalment of equal amount was required to be paid latest by the last day of the month. 3. For the month of June 1999, the respondent paid only Rs. 2 lacs against the first fortnightly instalment resulting in short payment of ex....

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....dered recovery of interest in respect of default in payment of excise duty on due date and imposed equal amount of penalty amounting to Rs. 25.05 lacs. 7. The respondent preferred an appeal against the order-in-original and the Commissioner (Appeals) vide impugned order dated 13-10-2004 accepted the plea of the respondent and reduced the penalty to Rs. 25,000/-. Feeling aggrieved of the aforesaid order-in-appeal, department has preferred this appeal. 8. Sh. R.K. Verma, ld. AR for the revenue has pleaded that the Commissioner (Appeals) has grossly erred in relying upon the judgement in the matter of Machino Montell (P) Ltd. - 2004 (62) RLT 709 (LB) = 2004 (168) E.L.T. 466 (Tri.-LB) and Rastriya Ispat Nigam Ltd. - 2004 (163) E....

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....iso to Rule 96ZO of Central Excise Rules, 1944 the adjudicating authority has no option or discretion in reducing the penalty to the extent less than the duty not/short paid, kept the issue of vires of Rule 96ZO open. The vires of Rule 96ZO(3) of Central Excise Rules, was challenged in Punjab & Haryana High Court in the matter of Bansal Alloys & Metals Pvt. Ltd. v. Union of India reported in 2011 (104) RLT ONLINE 101 (P & H) = 2010 (260) E.L.T. 343 (P & H) wherein it was held that the aforesaid rule to the extent of providing mandatory minimum penalty without any mens rea and without any element of discretion is excessive and unreasonable restriction on fundamental rights and is arbitrary. Hon'ble High Court further observed that moreover, ....