2004 (11) TMI 224 - AT - Central Excise

Summary

Issues:
Validity of penalty under Rule 96ZP(3) quashed by Commissioner (Appeals)

Analysis:
In this appeal, the Revenue challenged the validity of an order where the penalty on the respondents under Rule 96ZP(3) was quashed by the Commissioner (Appeals). The duty liability under the rule was not initially discharged by the respondents, leading to a show cause notice for payment of duty for a specific period. Even though the duty was later deposited by the respondents, the adjudicating authority still imposed a penalty equal to the duty amount. The Commissioner (Appeals) referred to legal precedents like M/s. Consolidated Coffee Ltd. and M/s. Sadashiv Castings, but the Tribunal found that these cases did not apply to the present situation. The High Court's ruling in the case of P.R. Steel Pvt. Ltd. was deemed mandatory for imposing penalties for non-payment of full duty under Rule 96ZP(3). Therefore, the Tribunal concluded that the penalty could not be entirely quashed, and modified the decision by imposing a penalty of Rs. 30,000 on the respondents, considering the circumstances, the payment of the duty, and the ongoing debate about the Compounded Levy Scheme's validity. As a result, the appeal of the Revenue was allowed.