2010 (12) TMI 146 - SC - Central Excise

Penalty - reduced penalties - that Rule 96-ZQ and Rule 96-ZO have a concept of discretion inbuilt cannot be sustained meaning thereby that the said Rules are mandatory and there is no discretion available for reducing the penalty Provisions of Rule 96-ZP being identical and pari materia with that of Rule 96-ZQ and Rule 96-ZO, the ratio of the aforesaid decision rendered by Three Judges Bench (2008 -TMI - 31520 - SUPREME COURT) is squarely applicable to the facts and circumstances of the present case. - appeals allowed - order passed by the High Court as also by the Tribunal set aside and restore the order passed by the adjudicating authority

Summary

Issues:
Appeal against judgment regarding imposition of penalty discretion.

Analysis:
The appeals were filed against a judgment of the Madras High Court which dismissed the appeal filed by the appellant, holding that authorities have discretion to impose reduced penalties based on the facts of each case. The High Court concluded that the authorities are not bound to impose the maximum penalty and can reduce it based on circumstances. The question of law framed was whether the Tribunal was correct in reducing penalties imposed for duty payment default. The High Court referred to various decisions before reaching its conclusion. The appellant argued that a previous Supreme Court decision clarified the lack of discretion in penalties under Rule 96-ZQ and Rule 96-ZO, which are similar to Rule 96-ZP applicable in this case. Upon comparing the provisions, the Supreme Court found them to be identical. The Supreme Court referred to a previous case where it was held that there is no discretion available for reducing penalties under Rule 96-ZQ and Rule 96-ZO, which also applies to Rule 96-ZP. Consequently, the Supreme Court allowed the appeals, set aside the High Court and Tribunal orders, and restored the adjudicating authority's order, with each party bearing their own costs.