2009 (7) TMI 76

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....notice penalty was sought to be imposed under Section 11 AC of the Central Excise Act, 1944 read with Rule 173Q of Central Excise Rules, 1944 and that under Rule 173Q the penalty can be imposed even for the period prior to 28.9.96? ii) that the learned Tribunal has erred in law in not considering the fact that Rule 173 Q under which the penalty was sought to be imposed was applicable at the relevant time and was inserted under the rule making power of the Act vide Notification No.74/74-C.E., dated 6^th April, 1974 much prior to section 11 AC which was inserted vide Notification No.33/96-C.E.(N.T.), dated 28.9.1996. That even if section 11 AC was not applicable Rule 173 Q was applicable and therefore the penalty could be imposed. The noti....

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....d Rule 173Q and Rule 226 of the Central Excise Rules, 1944 was also sought to be imposed. The assessee was issued a show cause notice in this behalf on 27.3.1997. After considering the reply of the assessee the Assessing Officer came to the conclusion that the assessee did not fulfil the conditions laid down in the notification in question since copper scrap used by the assessee for the manufacture of copper articles was not duty paid. The Assessing Officer specifically held that the evidence on record shows that the parties claim that they had availed all the concessional duty correctly was incorrect since they knew that it had not purchased any duty paid copper scrap. When no duty paid scrap was purchased the question of availing any cred....

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....d interest in respect of the proceedings relating to the period prior to 28.9.1996. However, we find that Rule 173Q of the Rules also provides for imposition of penalty up to three times of the value of the goods. In the present case the penalty imposed is only equivalent to the duty imposed on the goods. Even if Sections 11AB and 11AC were not applicable the authorities had also made reference to Rule 173Q and derived power under this Rule to impose penalty. Therefore, in our view the order of the learned Tribunal vacating the penalty is against law." The present case is squarely covered by the law laid down by us. Even in the present case the penalty is only equal to the value of the goods and as such there is no error in the order imp....