2006 (2) TMI 400 - AT - Central Excise

Production capacity based duty - Annual capacity of Production - Penalty - Double Jeopardy - Constitution of India

Summary

Issues:
- Appellant's liability for penalty under Rule 96ZP(3) of the Central Excise Rules, 1944 for late payment of duty.
- Applicability of interest and penalty provisions for defaulting manufacturers.
- Interpretation of the doctrine of double jeopardy in the context of penalty imposition.
- Judicial precedents regarding the imposition of penalties for delayed payment of duty.

Analysis:
1. The appeal challenged the penalty imposed on the appellant by the Commissioner (Appeals) for late payment of duty under Rule 96ZP(3) of the Central Excise Rules, 1944. The appellant had committed multiple defaults in paying duty amounts beyond the due dates, making them liable for interest and penalty as per the rule.

2. The appellant contended that since the outstanding duty amounts were paid in the succeeding months with interest, the imposition of penalty was unwarranted. They relied on a Tribunal decision emphasizing that there should be no double penalties for the same offense, citing constitutional principles.

3. The Tribunal noted that the appellant's defaults were not disputed, and the adjudicating authority had imposed a penalty in accordance with the rule. The appellate Commissioner, considering the amounts were deposited with interest before the show cause notice, reduced the penalty to Rs. 50,000 from the initial amount of Rs. 6,05,985.

4. The Tribunal clarified the difference between interest and penalty, highlighting that they stand on different legal grounds. The doctrine of double jeopardy, as enshrined in the Constitution, protects against multiple prosecutions and punishments for the same offense. The Tribunal referenced legal precedents to support the imposition of penalties for delayed duty payments.

5. Considering the circumstances and the appellant's breach of Rule 96ZP(3), the Tribunal found no reason to interfere with the appellate Commissioner's decision to reduce the penalty. The appeal was summarily dismissed, upholding the reduced penalty of Rs. 50,000. The judgment was dictated and pronounced on 13-2-2006.