TaxTMI 
TaxTMI 
2019 (7) TMI 954
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....the order dated 18.08.2004 made by the Additional Commissioner, Customs & Central Excise, Panaji, confirming the demand made on the Petitioner and also requiring the Petitioner to pay the interest and penalty. The operative portion of the order dated 18.08.2004 reads thus : "In respect of the said assessee viz. M/s Mandovi Ispat Pvt. Ltd., M-I, Cuncolim Industrial Estate Goa, I pass the following order: a) Duty demand of Rs. 1,64,917/- (Rupees One Lakh Sixty Four Thousand Nine Hundred and Seventeen Only) raised vide SCN No.F.No.CE/MAR/MIPL/22/SCND/97- 08/dtd.02.03.98 is confirmed. In addition, I impose penalty under Rule 96ZO(3) of the Rules on the said assessee, amounting to Rs. 1,64,917/- (Rupees One Lakh Sixty Four Thousand Nine Hundred and Seventeen Only ) in respect of this SCN. (b) Duty demand of Rs. 6,74,139/- (Rupees Six Lakhs Seventy Four Thousand One Hundred and Thirty Nine Only) raised vide SCN No.F.No.CE/MAR/MIPL/31/ SCND/97-98 dated 01.04.98 is confirmed. In addition, I impose penalty under Rule 96ZO(3) of the Rules on the said assessee, amounting to Rs. 6,74,139/- (Rupees Six Lakhs Seventy Four Thousand One Hundred and Thirty Nine Only ) in ....
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....he actual date of payment in terms of Rule 96ZO(3) of CER, 1944. The Range Supdt. to work out the correct interest amount." 4. Ms. Asha Desai has raised preliminary objection to the maintainability of this petition by pointing out that as against the impugned order dated 27.02.2018, the Petitioner, has alternate remedy under the provisions of Central Excise Act, 1944. She points out that the impugned order itself states that the appeal is maintainable to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) as against the impugned order. For these reasons, she urges that the present petition may not be entertained and the Petitioner be relegated to avail an alternate remedy of appeal which is available under the said Act. 5. Mr. Doiphode, learned counsel for the Petitioner submits that one of the main contentions raised by the Petitioner was that the annual capacity of production ought to have been determined on the basis of actual power supply position and not merely the sanctioned power supply position. He points out that there is material on record to suggest that the power supply was constantly interrupted and there was no continuation of uninterrupted power sup....
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....he second contention raised by Mr. Doiphode is concerned, the same deserves acceptance in the light of the categorical rulings of the Hon'ble Apex Court in the case of Shree Bhagwati Steel Rolling Mills (supra). 10. The penalty and interest has been levied/upheld in the present matter by reference to the Rule 96ZO(3) of the Central Excise Rules,1944. In Shree Bhagwati Steel Rolling Mills (supra), the Hon'ble Apex Court has declared the interest and penalty provisions under Rules 96ZO, 96ZP and 96ZQ of the Central Excise Rules, 1944 to be invalid for detailed reasons set out in the said judgment. 11. In paragraphs 38, 39 and 44 of Shree Bhagwati Steel Rolling Mills (supra), this is what the Hon'ble Apex Court has observed. 38. Under Section 37(3), the statute itself provides in all cases where no other penalty is provided by the Act that a penalty not exceeding Rs. 5,000/- alone can be levied. Sub-Section(4) is even more telling. Even in cases where there is a clandestine removal of excisable goods, and cases where the assessee intends to evade payment of duty, the assessee is liable to a penalty not exceeding the duty leviable on such goods or Rs. 10,000/....
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....aid, the Additional Commissioner was obviously not justified in levying interest or in imposing any penalty in excess of Rs. 10,000/- relying upon the provisions of Rule 96ZO as well as other rules which have now declared as ultra vires by the Hon'ble Apex Court in Shree Bhagwati Steel Rolling Mills (supra). Similarly, the Commissioner (Appeals) was also not justified in upholding such levies despite the fact that the decision of the Hon'ble Apex Court in Shree Bhagwati Steel Rolling Mills (supra) specifically cited before it. To that extent therefore, the impugned orders warrant interference. 13. The perusal of the memo of appeal instituted by the Petitioner before the Commissioner (Appeals), indicates that this contention was specifically raised by the Petitioner. However, without proper consideration of this contention, the Commissioner (Appeals) vide impugned order, has proceeded to uphold the levy of interest and penalty. From the perusal of the decision in Shree Bhagwati Steel Rolling Mills (supra), the penalty to the maximum extent of Rs. 10,000/- could have been sustained. However, the Commissioner (Appeals), has chosen to sustain the penalty far in excess of Rs.....