2000 (5) TMI 381 - AT - Central Excise

Summary

Issues:
- Appeal against imposition of mandatory penalty and interest under Section 11AC and 11AB.
- Applicability of penalty and interest provisions retrospectively.
- Date of offense and duty liability discharge in relation to legislation enactment date.

Analysis:
The Revenue filed an appeal challenging the Order-in-Appeal that set aside the mandatory penalty and interest imposed under Sections 11AC and 11AB. The Commissioner applied the decision in the case of Maruti Udyog Ltd., stating that the penalty and interest provisions do not have retrospective effect. The Revenue argued that since the show-cause notice was issued after the enactment of the Act, it should apply. The Tribunal heard arguments from both sides, where the Revenue sought confirmation of the penalty and interest. The duty amount confirmed was Rs. 6,702, with a penalty imposed equal to that amount under Section 11AC and 20% interest.

The appellant's counsel contended that the duty confirmation was challenged separately and succeeded at the stay stage. Referring to the decision in the case of Castrol India Ltd., it was argued that the imposition of mandatory penalty was not warranted. The Tribunal had already ruled in Maruti Udyog Ltd. that legislation does not have retrospective effect, even if the show-cause notice was issued post-enactment. The Tribunal found that the Revenue failed to establish the need for confirming the penalty and interest, especially since the duty amount confirmation was successfully challenged by the appellant earlier.

Upon careful consideration of the arguments and relevant judgments, the Tribunal concluded that the Revenue did not present a strong case for upholding the mandatory penalty and interest under Sections 11AC and 11AB. The Tribunal emphasized that the date of the offense and duty liability discharge, which was in June 1996, predates the legislation enactment in August 1996. Citing the precedent set in Maruti Udyog Ltd., the Tribunal reiterated that the legislation does not apply retrospectively. Therefore, the appeal was rejected as the issue was already settled against the Revenue, and the date of the offense was deemed crucial in determining the applicability of the Finance Act for penalty imposition.