2011 (3) TMI 1715 - HC - Central Excise

Summary

Issues Involved: Appeal against deletion of penalty under Rule 96ZQ of Central Excise Rules.

Analysis:
1. Issue 1 - Reduction of Penalty by Commissioner:
The Deputy Commissioner initially imposed a penalty of Rs. 6,00,000 under Rule 96ZQ for non-payment of duty within the stipulated time. Upon appeal, the Commissioner reduced the penalty to Rs. 3,00,000. Both the Department and the assessee filed separate appeals against this decision. The CESTAT at Mumbai dismissed the Revenue's appeal while allowing the assessee's appeal, leading to the Revenue's application for Rectification of the Mistake, which was also dismissed.

2. Issue 2 - Tribunal's Decision on Penalty Deletion:
The Tribunal deleted the penalty under sub-rule (5) of Rule 96ZQ based on the fact that the assessee had paid the entire duty along with interest by 31-7-1999. It was noted that although the duty was not deposited by the due date of 6-9-1999, the amount was paid on 31-7-2009. This deviation from the stipulated timeline under sub-rule (3) of Rule 96ZQ was considered, but the Tribunal found no defect in reducing the penalty based on the circumstances of the case.

3. Conclusion:
The High Court, after considering the provisions of sub-rule (5) of Rule 96ZQ and the facts presented, upheld the Tribunal's decision to reduce the penalty. Consequently, the appeal against the deletion of the penalty failed, and the appeal was dismissed accordingly.