2014 (9) TMI 714 - HC - Central Excise

Levy of interest and penalty - Compounded levy scheme u/s 3A - payment of duty on the basis of Annual Capacity of Production (ACP) - Notification No. 48/97 CE(NT) dated 1.8.97 - Revenue Officials authority to levy penalty under the repealed provision - Held that - Held that - Amendment of notifications issued under Section 37 of Central Excise Act and validation of certain actions taken - (1) The notifications of the Government of India, in the Ministry of Finance (Department of Revenue), numbers G.S.R.448 (E) dated the 1st August, 1997 G.S.R. 503 (E) dated the 30th August, 1997 and G.S.R.130(E) dated 10th March 1998, issued under Section 37 of the Central Excise Act, shall stand amended and shall be deemed to have been amended retrospectively in the manner as specified against each of them in column (3) of the Fourth Schedule, on and from the corresponding date mentioned in column (4) of that Schedule and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or any authority, any action taken or anything done or purported to have been taken or done under the said notifications, shall be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if, the notifications as amended by this sub-section had been in force at all material times. For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable if this section had not come into force. Therefore, the contentions raised by the appellant is not sustainable and the case law referred by the appellant has been considered by the Division Bench. As far as the penalty is concerned, the Commissioner (appeals) has reduced the penalty and the Tribunal was right in upholding the order of the Commissioner (Appeals).

Summary

Issues:
- Applicability of duty payment based on Annual Capacity of Production (ACP) under Central Excise Act.
- Imposition of interest and penalty for delayed duty payment.
- Appeal against penalty and interest imposition.
- Omission of Sec.3A of the Act and Rule 96ZP of the Rules.
- Validity of penalty imposition post omission of relevant provisions.

Issue 1: Applicability of duty payment based on ACP under Central Excise Act:
The appellant, a manufacturer of hot re-rolled products, opted for duty payment based on ACP as per Notification No. 48/97CE(NT) dated 1.8.97 under sec.3A of Central Excise Act 1994. Duty was required to be paid by the 10th of each month, failing which interest and penalty were applicable. The appellant, liable for duty from April 1999 to March 2000, paid late, leading to a show cause notice for interest and penalty.

Issue 2: Imposition of interest and penalty for delayed duty payment:
The original authority imposed a penalty of &8377; 23,37,816/- and demanded interest of &8377; 25,252/- for the delayed duty payment. The appellant contended that as they operated under a compounded levy scheme for specific products, they were not liable for interest and penalty. However, the Commissioner (Appeals) upheld the penalty at &8377; 7,79,272/- and interest at &8377; 24,194/-, leading to the appellant's appeal to the Tribunal.

Issue 3: Appeal against penalty and interest imposition:
The Tribunal upheld the penalty and interest, citing the applicability of sub Rule (3) of Rule 96ZP of Central Excise Rules. The appellant challenged this decision, leading to the present appeal before the High Court.

Issue 4: Omission of Sec.3A of the Act and Rule 96ZP of the Rules:
The appellant argued that post the omission of Sec.3A of the Act and Rule 96ZP of the Rules, revenue officials lacked authority to levy penalties under the repealed provisions without a saving clause. However, a Division Bench judgment addressed this issue, citing retrospective amendments under Section 37 of the Act validating past actions.

Issue 5: Validity of penalty imposition post omission of relevant provisions:
The High Court clarified that the appellant's contentions were unsustainable post the retrospective amendments validating past actions under Section 37 of the Act. The court noted that the Division Bench had addressed similar issues in a previous judgment, rendering the appellant's case law irrelevant. The court affirmed the penalty reduction by the Commissioner (Appeals) and upheld the Tribunal's decision, dismissing the appeal.

This judgment primarily dealt with the duty payment obligations based on ACP under the Central Excise Act, the imposition of interest and penalty for delayed payments, and the subsequent appeal process. The High Court clarified the impact of the omission of relevant provisions on penalty imposition and validated past actions through retrospective amendments under Section 37 of the Act. Ultimately, the court dismissed the appeal, confirming the penalty reduction and the Tribunal's decision.