TaxTMI 
TaxTMI 
2014 (7) TMI 922
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Clause (ii) of third proviso to sub-rule (3) of Rule 96 Z O of the Central Excise Rules, 1944 which is in the nature of imposition of mandatory penalty and the adjudicating authority/appellate authority is bound to impose a penalty equivalent to outstanding amount of duty or Rs. 5,000/- whichever is greater? b) Whether CESTAT can exercise discretion in the matter of imposing penalty and reduce the same without such discretion being conferred under relevant rules ? c) On the present issue, there is no authorization pronouncement of any High court or Supreme Court and which issue occurs regularly as such the substantial question of law as this aspect needs to be decided by this High Court in the present CEA? 2. For the purpose of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by referring the judgment of the Honble Supreme Court in STATE OF MADHYA PRADESH Vs. BHEL [1998 (99) ELT 33 (SC)] and the judgment of the Madras High Court in BEAUTY DYERS Vs. UOI AND OTHERS had dismissed the appeal confirming the orders of the Commissioner (Appeals). In the above factual background, the substantial questions of law, which are set out above, said to have been arisen from the orders of the CESTAT are referred to this Court. 4. The sheet anchor argument of the learned counsel for the Department is that there is no dispute with regard to finding of fact that the respondent had defaulted in payment of duty and thereby violated the Induction Furnace Annual capacity Determination Rules, 1997 and thus, invited penalty under Rul....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... correctness of the view taken in the above judgment. However, he would also point out that in DHARAMENDRA TEXTILES case (4 Supra) the validity of Rule has not been decided and in fact the same was left open for the reason that the Honble Supreme Court had noticed. Some of petitioners in the Batch had challenged the validity of Rule and it is pending consideration before the Court and also before various High Courts. He would further point out that this judgment of the Supreme Court was rendered on 29-09-2008 and thereafter, the Division Bench of Punjab and Haryana High Court in BANSAL ALLOYS AND METALS PRIVATE LIMITED Vs. UNION OF INDIA [2010 (260) E.L.T. 343 (P & H)] had considered the vires of the Rule and had struck down the Rules by ho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s below had accepted the fact that there is an impossibility of compliance of payment of duty on due date on account of 15-11-1998 being a Sunday. In other wards, the authorities below had consistently found that there was imminent justifiable reason and there was a genuine cause for the respondents inability to pay the duty amount on the due date. Be that as it may, in view of the judgment of the Supreme Court that imposition of penalty in terms of Rule 96ZO is held to be mandatory, now, the question for consideration would be whether the demand in the present cases would be sustainable, when the relevant rule, which was the basis for demand, having been held to be ultravires the Act and having been struck down is justifiable? It is well s....