2005 (3) TMI 656 - AT - Central Excise

Summary

Issues:
1. Penalty imposition under Rule 96ZQ(5) based on Tribunal judgments.
2. Validity of Notifications issued under Rule 3.
3. Sustainability of penalty for delayed payment of duty amount.

Analysis:
1. The appeal involved the imposition of a penalty under Rule 96ZQ(5) as per the Order-in-Appeal No. 48/2003 (H-I) CE, dated 30-4-2003. The Commissioner (Appeals) had limited the penalty to Rs. 5,000, following a Tribunal judgment in the case of Visen Fabrics v. CCE, Mumbai-III. The Revenue contended that the penalty was insufficient and sought enhancement. The learned SDR cited the Tribunal judgment in Nirav Textile Processors v. CCE, Mumbai-VI, while the respondent's Consultant referenced a Madras High Court judgment declaring Notifications under Rule 3 as ultra vires. Additionally, the Consultant relied on the case of Shree Sai Prasad Dyg & Ptg Mills v. CC & CE, Surat, where the Tribunal's Mumbai Bench held that the penalty for delayed duty payment was unsustainable due to the Rule being declared ultra vires by the High Court.

2. Upon reviewing the case laws and submissions, the judge found no merit in accepting the Mumbai Bench judgment in Nirav Textile Processors v. CCE, Mumbai-VI, as the same Bench had later set aside a penalty in another case due to the Rule being declared ultra vires by the Madras High Court. The judge determined that the ratio of the citations relied upon by the respondent's Consultant should be followed in this instance. Consequently, the judge concluded that there was no merit in the appeal, leading to its rejection. The judgment was pronounced and dictated in open court.