2007 (3) TMI 279 - HC - Central Excise

Summary

Issues involved: Appeal u/s 35G of Central Excise Act challenging CESTAT order imposing duty, penalty, and interest.

Summary:

1. Abatement Claim under Rule 96ZO(2): The appellant, a manufacturer of M.S. Ingots, claimed abatement under Rule 96ZO(2) for a period of inactivity due to unit closure. The appellant failed to demonstrate compliance with requirements such as informing authorities about unit closure and production restart. Lack of evidence supporting abatement claim led to dismissal of the argument by the Deputy Commissioner, Commissioner (Appeals), and CESTAT.

2. Imposition of Penalty and Interest: Rule 96ZO(3) mandates payment of duty, interest, and penalty. The provision specifies interest at 18% per annum and penalty equal to the unpaid duty or Rs. 5,000, whichever is greater. The appellant's plea against penalty and interest imposition was rejected based on the clear language of the rule, emphasizing the mandatory nature of the penalties.

3. Judicial Precedent and Dismissal of Appeal: The court referenced a judgment from the Allahabad High Court to support the mandatory nature of penalties under Rule 96ZO(3). The CESTAT's decision to restore the original order, including penalties, was upheld, leading to the dismissal of the appeal.

In conclusion, the appeal challenging the imposition of duty, penalty, and interest under the Central Excise Act was dismissed by the Bombay High Court, emphasizing the mandatory nature of penalties and the lack of evidence supporting the abatement claim by the appellant.