2007 (2) TMI 223 - HC - Central Excise

Summary

Issues involved: Levy of penalty under Rule 173Q(1)(bbb) of the Central Excise Rules, 1944.

Issue 1: Levy of penalty under Rule 173Q(1)(bbb) of the Central Excise Rules, 1944

The Revenue filed an appeal u/s 35G of the Central Excise Act, 1944 against an order passed by the Customs, Excise & Service Tax Appellate Tribunal. The substantial question of law raised was whether an offender can be let off from penalty if specific provisions for the penalty were inserted on a later date, even if guilt is admitted. The case involved an assessee who wrongly passed on Modvat Credit through fake invoices in 1997 and 1998. It was noted that during the relevant period of the transactions, availing Modvat credit on additional custom duty was not considered an offence chargeable to penalty. The amendment making it liable to penal action was dated 14-7-1999, after the transactions in question. The Court referred to a circular stating that penal provisions for such actions did not exist before the amendment. As there was no liability for penal action during the relevant period, the Court dismissed the appeal, stating that no substantial question of law arose in this case.