2009 (7) TMI 1107 - HC - Central Excise

Summary

Issues involved: Disposal of three Central Excise Appeals together, imposition and reduction of penalty, interpretation of penalty provisions u/s Rule 96ZQ, reconsideration of penalty amount, applicability of Supreme Court judgments.

Central Excise Appeal No. 197 of 2007: The appellant's counsel informed the court about two related appeals, Central Excise Appeal No. 196 of 2007 and Central Excise Appeal No. 106 of 2006, which were not served. Despite this, as the issue was from the same order, all three appeals were considered together. The original penalty of Rs. 4.50 lakh imposed on the respondent under Rule 96ZQ(ii) was reduced to Rs. 3 lakh by the Commissioner (Appeals). The Revenue's appeal against this reduction was dismissed by the Tribunal. The Revenue then appealed to the High Court, questioning the nature of the penalty under Rule 96ZQ. The court decided that the penalty should be co-extensive with the duty imposed, leading to the restoration of the original penalty amount of Rs. 4.50 lakh.

Central Excise Appeal No. 196 of 2007: The assessee appealed against the Commissioner (Appeals) decision, which was set aside by CEGAT, remanding the matter back to the Commissioner. The Commissioner then reduced the penalty from Rs. 4.50 lakh to Rs. 2.25 lakh. Both the assessee and the Revenue appealed the CEGAT's decision. The Tribunal dismissed the Revenue's appeal, while partly allowing the assessee's appeal by imposing a reduced penalty of Rs. 5,000. The High Court decided that both orders needed to be set aside, and in line with Supreme Court judgments, the penalty was restored to the original amount of Rs. 4.50 lakh.

Central Excise Appeal No. 106 of 2006: The Revenue's appeal against the penalty reduction was dismissed by the Tribunal. The High Court, considering the subsequent orders and Supreme Court judgments, concluded that the penalty should be co-extensive with the duty imposed. Therefore, the orders of the appellate authorities were set aside, and the original penalty of Rs. 4.50 lakh was restored. The matter was disposed of accordingly.