AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2008 (3) TMI 316
X X X X Extracts X X X X
X X X X Extracts X X X X
....late Tribunal in reducing the penalty is in terms of Rule 96ZO of the Central Excise Rules, 1944, is sustainable?" 2. The materials facts for disposal of the appeals are as follows:- The first respondent/assessee M/s. Thirumala Alloys Casting (Pvt.) Ltd., manufacturer of MS ingots were paying duty thereon under the compounded levy scheme vide Rule 96ZO of the Central Excise Rules, 1944 read with Section 3A of Central Excise Act, 1944, then in existence. The assessee failed to discharge the duty liability for some months during 1998 for which two show cause notices under O.C. No. 2056 of 1998, dated 30-10-1998 and O.C. No. 569 of 1999 dated, 1-4-1999 were issued to them by the Range Officer, which were subsequently confirmed by the jurisdi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he 10th day of such month, he shall be liable to pay,- (i) the outstanding amount of duty along with interest thereon at the rate of eighteen per cent per annum calculated for the period from the 11th day of such month till the date of actual payment of the outstanding amount; and (ii) a penalty equal to the amount of duty outstanding from him at the end of such month or five thousand rupees, whichever is greater: Provided further that if the manufacturer fails to pay the total amount of the duty payable for each of the months from September, 1997 to March, 1998 by the 30th day of April, 1998, he shall also be liable to pay a penalty equal to the outstanding amount of duty as on the 30th day of April, 1998 or five thousand rupees, whiche....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hall be liable to,- (i) pay the outstanding amount of duty along with interest thereon at the rate of eighteen per cent per annum, calculated for the period from the 16th day of such month or the 1st day of next month, as the case may be, till the date of actual payment of the outstanding amount; and (ii) a penalty equal to such outstanding amount of duty or five thousand rupees, whichever is greater] [Provided that if the manufacturer fails to pay the total amount of the duty payable for each of the months from September, 1997 to March, 1998 by the 30th day of April, 1998, he shall also be liable to pay a penalty equal to the outstanding amount of duty as on 30th day of April, 1998 or five thousand ru....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding. Hence, the Tribunal has been over indulgent to the assessee by reducing the penalty, which it strictly speaking could not do." 7. A very similar worded Section 7(5) of the Entry Tax Act of the State of Madhya Pradesh has been considered by the Supreme Court in the case of State of Madhya Pradesh v. Bharat Heavy Electricals reported in 1998 (99) E.L.T. 33 (S.C.). Section 7(5) of the Entry Tax Act reads as follows:- "(5) Where a registered dealer referred to in sub-section (1) or sub-section (2) has, in the course of his business, sold local goods to other registered dealers and has failed to make the statement referred to in sub-section (1) [...], it shall be presumed that he has facilitated the evasion of entry tax on the local good....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pulated therein is only the maximum amount which could be levied and the assessing authority has the discretion to levy lesser amount, depending upon the facts and circumstances of each case. Construing Section 7(5) in this manner, the decision of the High Court that Section 7(5) is ultra vires cannot be sustained". 9. The above Supreme Court decision has been taken note of by the Tribunal with reference to the facts of the present case while passing the impugned orders. The circumstances of the case has been explained by saying that it had found an unexplained delay, albeit short, in the payment of duty by the assessee after receipt of the second abatement order of the Commissioner. In the circumstances, the assessee's prayer for doing aw....