2007 (3) TMI 58

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....der Rule 96ZQ 5(ii) equal to the amount outstanding at the end of month. On appeal(s) by the parties, the Com missioner (Appeals) reduced the penalty to 10% of the penalty imposed by the Original Authority. The assessees are in appeal seeking total waiver of penalties, whereas the Department is in appeal seeking restoration of penalty imposed by the original authority. Therefore, the appeals are being disposed of by a common order. 2. The relevant facts, in brief, as they relate to specific appeals, are as follows : Balakrishna Dyeing & Printing Mills - Party's Appeal No. E/1068/2003 - Department's Appeal No. E/1177/2003 In this case, the assessee was required to pay a sum of Rs. 7 lakhs before 30-9-2000 and actually paid on 3-10-2000.....

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.... lakhs before 31-8-2000 which was paid by the assessee on 1-9-2000 and accordingly the Original Authority imposed a penalty of Rs. 2 lakhs which was reduced on party's appeal to Rs. 20,000/- by the Commissioner (Appeals). In the second case, there was a default in paying a sum of Rs. 40,000/- before 28-2-2001 which was paid by the assessee on 1-3-2001 and accordingly the Original Authority imposed a penalty of Rs. 40,000/- which was reduced on party's appeal to Rs. 4,000/- by the Commissioner (Appeals). In the third case, there was a default in paying a sum of Rs. 2.7 lakhs be fore 31-10-2000 which was paid by the assessee on 1-11-2000 and accordingly the Original Authority imposed a penalty of Rs. 2.7 lakhs which was reduced on party's a....

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....arly accounting day for the Bank and the transactions were closed to the public and the Department had not made any alternative arrangement to receive the dues on the last day. The succeeding days i.e. 1-10-2000 and 2-10-2000 were holidays being Sunday and Gandhi Jayanti respectively and, therefore, the duty was paid on 3-10-2000 by the assessees. We hold that in these cases, the time for payment should be computed as provided for in Section 10 of the General Clauses Act, 1897 which is reproduced below: "Section 10. Computation of Time - (1) Where, by any Central Act or Regulation made after the commencement of this Act, any or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescri....

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....rt in the case of Parmeshwar Dyeing & Printing Mills Pvt. Ltd. v. Union of India, 2005 (191) E.L.T. 86 (Guj.), has held, in similar circumstances, that imposition of penalty equal to the duty outstanding was not warranted. The learned SDR submits that there has been delay in these cases and even if it is of one day, as per rules, the penalty is imposable which is Rs. 5,000/- or the amount equal to the outstanding amount at the end of the month whichever is higher. 5.1 Following the ratio of the law laid down by the Hon'ble High Court of Gujarat in the case of Parmeshwar Dyeing & Printing Mills Pvt. Ltd. v. Union of India, supra, we hold that, penalty should be commensurate with the gain, if any, made by the parties. In Appeal No. E/1116/03....