2006 (2) TMI 530 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 96ZQ authorizing penalty imposition.
2. Application of previous judgments by the Hon'ble Madras High Court and the Jurisdictional Hon'ble High Court of Gujarat.
3. Determination of penalty amount in relation to duty amounts paid.

Analysis:
1. The judgment addresses the interpretation of Rule 96ZQ concerning penalty imposition. The learned D.R. highlighted a decision by the Hon'ble Madras High Court in the case of Beauty Dyers v. Union of India, emphasizing that the penalty specified in Rule 96ZQ should be considered the maximum amount. Another judgment by the same single Judge of the Madras High Court held that Rule 96ZQ is not ultra vires Section 3A and 37 of the Central Excise Act, 1944. Additionally, the Division Bench decision of the Jurisdictional Hon'ble High Court of Gujarat in Ambuja Synthetics Mills v. Union of India upheld penal action under Rule 96ZQ, stating that the amount specified in the rule is the maximum, and the assessing authority has the discretion to impose a lesser penalty amount.

2. The judge, after reviewing the case records and considering the decisions of the Hon'ble High Court of Gujarat, set aside the impugned order passed by the lower appellate authority. The original orders were restored with the modification that penalties imposed should be reduced to 10% of the duty amounts in each case. This decision was based on the fact that duty amounts, along with interest, had already been paid. The judge's ruling aligned with the interpretation of previous judgments and aimed to strike a balance between penalty imposition and the duty amounts paid by the appellant.

3. Consequently, the departmental appeals were disposed of in accordance with the above terms, providing clarity on the application of Rule 96ZQ and the determination of penalty amounts in relation to duty amounts already settled. The judgment not only considered legal precedents but also ensured a fair and balanced approach in resolving the issues at hand.