TaxTMI 
TaxTMI 
2014 (5) TMI 300
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....7 of 2005. 2. This appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (in short "the Act") against the order dated 15.2.2005 (Annexure A-3) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as "the Tribunal"). In this appeal, the following substantial question of law has been framed:- "Whether on the facts and circumstances of the case, the Tribunal was justified in reducing the penalty levied on the assessee under Rule 96ZO(3) (ii) of the Central Excise Rules, 1944? 3. The assessee is engaged in the business of manufacture of Non-alloy Steel Ingots falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 which we....
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....id not confer any discretion on the authority to levy lesser penalty. According to the learned counsel, the Special Leave Petition filed against the said decision is pending in the Hon'ble Supreme Court. 5. After hearing learned counsel for the appellant(s), we do not find any merit in the appeal. This Court in Bansal Alloys & Metals Pvt. Ltd's case (supra) deciding the question of vires of Rules 96ZO(3), 96ZP and 96ZQ of the Rules held the said provisions to the extent of providing for mandatory minimum penalty without mens rea and without any element of discretion as excessive and unreasonable restriction on fundamental rights being arbitrary and were accordingly declared to be ultra vires the Act and the Constitution. It was r....
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....r delay are held to be ultravires the Act and the Constitution. In CWP No.8555 of 2010, penalty has been sustained by the Tribunal to the extent of 100% which will stand quashed without prejudice to any fresh order being passed in accordance with law. It is made clear that if penalty has attained finality as in CWP No.18099 of 2009 upto this Court, this order will not affect the finality of such order. The appeals filed by the revenue against the orders of the Tribunal sustaining penalty proportionate to the default will stand dismissed." 6. Further, following the aforesaid judgment in Bansal Alloys & Metals Pvt. Ltd's case (supra), Gujarat High Court in Krishna Processors v. Union of India 2012 (280) ELT 186 (Guj.) decided the issue....
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....t situation, the provision for minimum mandatory penalty equal to the amount of duty even for slightest bonafide delay without any element of discretion is beyond the purpose of legislation. The object of the rule is to safeguard the revenue against loss, if any. The penalty has been provided in addition to interest. Mere fact that without mens rea, an can be punished or a penalty could be imposed is not a blanket power without providing for any justification. In the Indian Constitutional scheme, power of legislature is circumscribed by fundamental rights. Judicial review of legislation is permissible on the ground of excessive restriction as against reasonable restriction which is also described as proportionality test. 16. For the abov....