2006 (10) TMI 169 - HC - Central Excise

Summary

Issues:
1. Proper intimation of closure date for furnace.
2. Penalty imposition under Rule 96ZO(3) for non-payment of duty.

Issue 1: Proper Intimation of Closure Date for Furnace
The appeal involved a dispute regarding the proper intimation of the closure date of a furnace by the assessee, a manufacturer of non-alloy steel ingots. The assessee applied for abatement claim, but the claim was disallowed due to a delay in filing closure intimation as required under Rule 96ZO(2) of the Central Excise Rules, 1944. The Tribunal accepted the assessee's explanation that the delay was due to intervening holidays. The High Court, after hearing the appellant, held that since the explanation was accepted on facts, no substantial question of law arose regarding the eligibility for the abatement claim. Therefore, the court dismissed the appeal on this issue.

Issue 2: Penalty Imposition under Rule 96ZO(3) for Non-Payment of Duty
The second issue revolved around the penalty imposed under Rule 96ZO(3) for the non-payment of the full amount of duty by the due date by the manufacturer. The assessee failed to pay the full amount by the specified date, resulting in a penalty being imposed. The court referred to a previous judgment where it was established that the penalty under Section 96ZO of the Act was discretionary and not mandatory, based on individual facts. In the present case, the court found that the appropriate authority had exercised discretion in reducing the penalty amount, and there was no indication of perversity in the decision. Consequently, the court concluded that no substantial question of law arose in this regard and dismissed the appeal on this issue as well.

In summary, the High Court of Punjab & Haryana at Chandigarh dismissed the revenue's appeal against the Customs, Excise & Service Tax Appellate Tribunal's order. The court upheld the acceptance of the assessee's explanation for the delay in closure intimation, finding no substantial question of law on the eligibility for abatement claim. Additionally, the court affirmed the discretionary nature of the penalty under Rule 96ZO(3) and found no perversity in the authority's decision to reduce the penalty amount, leading to the dismissal of the appeal on this issue too.