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2014 (11) TMI 493
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....1997). The appellant had opted for monthly payment of duty under Rule 96ZP(3) of the Central Excise Rules, 1944, hereinafter called as the Rules. The Assistant Commissioner of Central Excise, Chennai-V Division, in his letter dated 30-9-1997 fixed the annual production capacity of the appellant. Accordingly, the duty liability of the assessee had been worked out at Rs. 3,61,477/- per month by the Commissioner. The appellant failed to discharge the duty liability and therefore, a show cause notice dated 21-7-1999 was issued demanding payment of differential duty for the period from February, 1999 to June, 1999 as prescribed under Section 11A of the Act besides proposing interest and imposition of penalty under Rule 96ZP(3) of Rules read with Section 3A of the CST Act. A similar notice dated 12-1-2000 was issued for the subsequent period from June, 1999 to December, 1999. The appellant did not raise any objection to the show cause notices and therefore, the original authority confirmed the entire demand payable for the period from 1-2-1999 to 31-12-1999 as proposed in the show cause notice, however, the levy of statutory interest and penalty under Rule 96ZP(3) of the Rules was deferr....
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....and the imposition of penalty of Rs. 33 lakhs on the appellant is too harsh. Accordingly, by the order dated 20-2-2003, the Tribunal reduced the penalty imposed by the second respondent to Rs. 10 lakhs as against Rs. 33 lakhs. Aggrieved by the said order dated 20-2-2003 of the Tribunal, the present Civil Miscellaneous Appeal is filed. However, the Revenue has not filed any appeal against the reduction of the quantum of penalty. 6. At the time of admission on 4-4-2007, this Court framed the following substantial questions of law for consideration, namely (i) Whether the Tribunal can confirm an order of the second respondent which has been passed after the omission of Section 3A with effect from 11-5-2001 without any saving clause? (ii) Whether the order passed by the second respondent dated 20-2-2003 has nay force after the omission of Section 3A and Rule 96ZP with effect from 11-5-2001? and (iii) Whether the Tribunal is right in ignoring the decision of the Co-ordinate Bench reported in 2006 (104) ECC 57 in the case of Kundil Alloys Private Limited v. CCE wherein the proceedings under the provisions of Rul....
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.... of the Gujarat High Court considering the fact that pursuant to the notification dated 1-3-2001 issued by the Central Government omitting Rules 96ZQ, 96ZO and 96ZP shows that the same does not make any provision similar to that contained in Section 6 of the General Clauses Act, nor does the same make any provision that liability under Rule 96ZQ would continue under the regular provisions after its omission. The Division Bench, taking note of the decision of the Honourable Supreme Court reported in M/s. Rayala Corporation Private limited v. Director of Enforcement - AIR 1970 SC 434 held that the notification afforded protection to things already done under the rule. In the case before the Division Bench of the Gujarat High Court, it was also found that the notification affords protection to things already done under the rules. Further, when Section 38A came to be inserted, the legislature did not make any provision permitting operation of Rule 96ZQ so as to permit initiation of proceedings under the said Rules. Therefore, the Division Bench held that upon omission of Rule 96ZQ of the Rules and in view of the language contained in the Notification dated 1st March, 2001, action alrea....
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....Rule 96ZQ of the Rules is ultra vires Articles 14 and 19(1)(g) of the Constitution of India as well as Section 37 of the Act and is beyond the authority of the rule making power of the Central Government and as such, is required to be struck down. It was further held that after the omission of Rules 96ZQ, 96ZP and 96ZO of the Rules with effect from 1-3-2001 no proceedings could have been initiated thereunder and after the omission of Section 3A of the Act with effect from 11th May, 2001, without any saving clause, no pending proceeding under the said rules which had not been concluded before the omission came into effect, could be concluded thereafter. 11. Though in the instant case there is no challenge to the constitutional validity of the Rule, the appellant challenged the levy of duty and the manner in which it was imposed. The learned counsel for the appellant would endeavour to submit that after omission of the provision, no proceedings could have been conducted or continued for imposition of penalty as per the decision of the Division Bench of the Gujarat High Court mentioned supra. 12. As against the decision of the Division Bench of the Gujarat High Court r....
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....y time during the period commencing on or from the 1st day of August, 1997 and ending with the day, the Finance (No. 2) Bill, 2000 receives the assent of the President, shall be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done or omitted to be done as if the amendments made by sub-section (1) had been in force at all material times and accordingly, notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or other authority - (a) any action taken or anything done or omitted to be done, during the said period in respect of any goods under the said notifications, shall be deemed to be and shall be deemed always to have been, as validly taken or done or omitted to be done as if the amendments made by sub-section (1) had been in force at all material times. (b) no suit or any other proceedings shall be maintained or continued in any Court, Tribunal or other authority for any action taken or anything done or omitted to be done in respect of any goods under the said notification, and no enforcement shall be made by any Court of any decree or order relating to such action taken or anything do....
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.... and to have always been, for all purposes, as validly and effectively taken or done or omitted to be done as if the amendments made by sub-section (1) had been in force at all material times. Thus, in terms of IV Schedule of Finance Act, 2009 with effect from 1-8-1997, the notification in GSR No. 448(E), dated 1-8-1997 was amended to include the words "powers conferred by Section 3A read with Section 37". Similarly, in respect of notification in G.S.R. 503(D), dated 30-8-1997, amended to include the words "powers conferred by Section 3A read with Section 37".' Similarly, amendments were made vide notification in G.S.R. 130(E), dated 10-3-1998 for inclusion of the words "powers conferred by Section 3A read with Section 37". Thus by virtue of the Finance Act, 2009, the contentions raised by the appellant are wholly untenable and cannot be accepted. 14. It is to be noted that the decision of the Division Bench of the Gujarat High Court reported in Krishna Processors v. Union of India - 2012 (280) E.L.T. 186 (Gujarat) mentioned supra was rendered on 16-3-2012 and the Finance (No. 2) Act, 2009 (Act No. 33 of 2009) has not been brought to the notice of the Division Bench of ....
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.... settled law that when a penalty is imposed by an Adjudicating Officer, it is done so in adjudicatory proceedings and not by way of fine as a result of prosecution of an accused for commission of an offence in a criminal prosecution. In the instant case, the Tribunal has failed to appreciate that the respondents had given undue and unfair advantage to the associated brokers, which is detrimental to the interest of the unit holders.............. 35. In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulation is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention must made by the defaulter with guilty intention or not. We also further held that unless the language of the statute indicates the need to establish the presence of mens rea, it is wholly unnecessary to ascertain whether such a violation was intentional or not.....