2006 (6) TMI 408 - AT - Central Excise

Summary

Issues:
- Imposition of penalty under Rule 96ZP of the Central Excise Rules, 1944 without a saving clause after its omission.
- Prima facie case against penalty and waiver of pre-deposit and stay of recovery.

Analysis:
The judgment deals with the issue of penalty imposed under Rule 96ZP of the Central Excise Rules, 1944 without a saving clause after its omission. The appellants were working under the Compounded Levy Scheme, discharging duty liability based on the Annual Capacity of Production determined by the jurisdictional Commissioner of Central Excise. An outstanding duty amount of Rs. 9,08,7917/- was paid later, resulting in a penalty of the same amount imposed by the Commissioner. The learned counsel argued that Rule 96ZP and Section 3A of the Central Excise Act were omitted without any saving clause in May 2001, rendering the Commissioner's order without legal authority. Citing a Tribunal decision in a similar case, the appellants contended that no binding judicial authority had been presented to override the Tribunal's decision, supporting their prima facie case against the penalty.

The Tribunal considered the arguments and the absence of a saving clause after the omission of Rule 96ZP and Section 3A of the Act. Referring to the precedent set by the Tribunal in a related case, where an order of penalty under a similar rule was set aside due to the lack of a saving clause, the Tribunal found merit in the appellants' contentions. Since no contrary binding judicial authority was presented, the appellants were deemed to have established a prima facie case against the penalty. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery as requested by the appellants. The judgment emphasizes the importance of legal provisions and the necessity of saving clauses to maintain the validity of penalties imposed under specific rules and acts.