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2013 (9) TMI 903 - ALLAHABAD HIGH COURTPenalty u/s 11AC – abatement claimed u/s 3A towards non production under compounded levy scheme - Held that:- If a manufacturer does not produce non-alloyed hot re-rolled steel during any continuous period of not less than seven days and wishes to claim abatement under Section 3A of the Act, he has to give intimation under Rule 96ZP(2) about closure of the units - either prior to the date of closure, or on the date of closure - If the manufacturer starts production again, he is required to give intimation about the same - either prior to the date of starting production or on the date of starting production. In the present it is not denied, nor there was any material to show that the factory continued production after October, 1997 - Even if the intimation was given subsequently, unless there was some material to show that the factory had run for a period beyond those two months the penalty could not be levied. In Union of India v. Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA ] and State of Madhya Pradesh v. Bharat Heavy Electricals [1997 (8) TMI 252 - SUPREME COURT OF INDIA ] - Penalty under Section 11AC of the Act can be imposed only when conditions mentioned in Section 11AC exist - The authorities do not have discretion in fixing the penalty, and that where the penalty is impermissible, it cannot be levied equal to the duty under Section 11AC of the Act - since the Tribunal recorded the findings that the penalty itself was not leviable - The Tribunal, therefore, erred in reducing the amount of penalty.
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