2013 (7) TMI 826 - AT - Central Excise

Time period for initiation of appeal under Rule 96 ZP (3)/ Rule 96 ZO(3) Held that - Hon ble Punjab & Haryana High Court in the case of Hari Concast reported in 2009 (4) TMI 170 - PUNJAB AND HARYANA HIGH COURT had held that with regard to similar provisions of Rule 96 ZO(3), held that though in the Rule, there is no period of limitation - Reasonable to adopt limitation period of five years and as such, after expiry of 5 years, no penal proceedings can be initiated - Tribunal in the case of Bhawani Castings Pvt. Ltd. had taken a contrary view, on appeal being filed before Hon ble Punjab & Haryana High Court, reversed The Tribunal judgment vide judgment reported in 2010 (4) TMI 284 - PUNJAB & HARYANA HIGH COURT, wherein Hon ble Punjab & Haryana High Court has followed its earlier judgment in Hari Concast Pvt. Ltd. (supra) and has held that penal proceedings under Rule 96 ZO(3) cannot be initiated after expiry of 5 years Decided against the Revenue.

Summary

Issues:
1. Imposition of penalty for delay in payment of monthly duty liability under Rule 96 ZP(3).
2. Interpretation of time limit for initiating penal proceedings under Rule 96 ZO(3).

Analysis:
1. The case involved a rolling mill under the Compounded Levy Scheme facing penalty for delayed payment of monthly duty liability. The Commissioner imposed a penalty of Rs.5,000 for each month of delay, totaling Rs.1,15,000 under Rule 96 ZP(3). The respondent appealed, citing a judgment by the Hon'ble Punjab & Haryana High Court in a similar case, which set aside the penalty. The High Court ruled that penal proceedings must be initiated within 5 years, leading to the Commissioner's decision being overturned.

2. The Revenue appealed the Commissioner's decision, arguing that there is no time limit specified in Rule 96 ZO(3) for initiating penal proceedings. The Tribunal in a previous case had supported this argument, stating that penal proceedings can be initiated even after 5 years. However, the presiding judge referred to the Hon'ble Punjab & Haryana High Court's judgment in the case of Hari Concast, which established a 5-year limitation period for initiating penal proceedings under Rule 96 ZO(3). The High Court's decision was upheld in another case, leading to the dismissal of the Revenue's appeal in this instance.

This detailed analysis highlights the key legal issues surrounding the imposition of penalties for delayed duty payment and the interpretation of time limits for initiating penal proceedings under the relevant rules.