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TMI Blog2009 (12) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... (5 of 1986) and who opted to pay duty under Section 3A of the Central Excise Act, 1944 read with Induction Furnace Annual Capacity Determination Rules, 1997, but fails to pay the whole of the amount payable for any month by the 15th day or the last day of such month, as the case may be, is mandatory or discretionary in nature? (iii) Whether mandatory equal penalty imposed under Rule 96ZO 3)(ii) can be reduced? Held that- the provisions for imposing penalty under Rule 96ZO (3)(ii) of the Rules are held to be mandatory and there is no discretion vested in any authority to reduce the aforesaid amount of penalty on the ground that there was no intention of evading payment of duty or commission of fraud, misrepresentation etc. Accordingly, both the questions No. 2 and 3 are answered against the dealer-respondent and in favour of the appellant-revenue. - 60 of 2006(O&M) - - - Dated:- 15-12-2009 - M.M. Kumar and Jaswant Singh, JJ. Central Excise Appeal No. 60 of 2006(O M) with CEA Nos. 159/2005, 55-56/2008, 39/2006, 26/2004, 81/2006 and 155/2005, S/Shri Sanjeev Kaushik and Gurpreet Singh, Senior Standing Counsels, Government of India (Indirect Taxes), and Puneet Bassi, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Tariff Act, 1985 (for brevity 'Tariff Act'). Under Section 3A of the Central Excise Act, 1944 (for brevity 'The Act') the ingots were chargeable to duty on lump sum basis in respect of the period from 1-9-1997 to 31-3-2000. The provision of Section 3A of the Act has to be read with Rule 96ZO of the Rules. The dealer had opted for payment of duty under Rule 96ZO(3) of the Rules which provide for fixing the amount of duty liability according to capacity of furnace installed in a factory. The capacity of the furnace installed in the factory premises of the assessee was determined by the Commissioner, Central Excise, Chandigarh, as follows:- (i) 8MT (two furnaces of 4 MT each) during the period 1-9-1997 to 12-2-1998 vide C.No.V(16) C.Levy/IF/22/T/97/14717-19 dated 14-10-1997. (ii) 4 MT (one furnace of 4 MT) during 13-2-1998 to 15-10-1998. vide C. No. I V(16) C.Levy/IF/22/T/97V20403-05 dated 15-5-1998. (iii) 3MT (one furnace of 3 MT) from 16-10-1998 to 31-12-1998, and 6 MT (Two furnace of 3 MT each) from 1-1-1999 to 31-3-2000 vide C.No./V(16)C.Levy/IF/22/T/97/l78-79 dated 9-1-2001. 4. It is pertinent to mention that Rule 96ZO was incorporated vide notification dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 21-3-2000 and the Tribunal has partially set aside the order and remanded the case for fresh decision in respect of the claims which were rejected. 7. In respect of the abatement for the period 26-12-1997 to 31-12-1997 and 1-1-1998 to 8-1-1998. the Commissioner had re -examined the matter and held that the claim made by the dealer for abatement was not admissible. The principal reason for the aforesaid view is that the factory of the assessee was not closed as a whole and there was continuous production of ingots. Therefore, as per sub rule 2 of Rule 96ZO of the rules read with Section 3A(3) of the Act, the claim of the dealer in respect of the aforesaid period was found not sustainable. 8. In respect of the period commencing from 24-1-1998 to 26-1-1998 also, the Commissioner had re-examined the matter and found that no abatement of the duty was admissible to the dealer for the aforesaid period. The principal reason given by the Commissioner was that the dealer did not comply with the provision of Rule 96ZO(2)(a) as the dealer failed to intimate the closure of factory prior to the date of closure. It could not produce any evidence even at the time of re-examina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view the facts and circumstances of the case and reduced the same to Rs.50,000/-. The operative part of the order dated 23-2-2005 (Annexure P-2), passed by the Tribunal reads thus:- "The learned counsel has contended that claim for three days i.e. 24-1-1998 to 26-1-1998 has been wrongly disallowed on the ground that intimation regarding the closure of the factory was received only on 27-1-1998. whereas it was sent on 24-1-1998 itself. In our view, this connection (sic. contention?) of the counsel deserves to be accepted. The abatement claims for the period 24-1-1998 to 9-2-1998 was lodged by the appellants on account of closure of their factory during these days. But the adjudicating authority has allowed the abatement only from 27-1-1998 to 9-2-1998. The rejection for the period 24-1-1998 to 26-1-1998 has been made on the ground that intimation regarding the closure of the factory was received in the department only on 27-1-1998. But the adjudicating authority has lost sight of the fact that intimation was sent by the appellants on 24-1-1998 itself and its receipt by the department on 27-1-1998 was not due to any fault on their part but on account of gazetted holidays. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le from fulfilling the obligation under the scheme. According to the learned counsel, there is no discretion vested in the Assessing Authority, Appellate Authority or the Tribunal to reduce the amount of penalty imposable as per Rule 96ZO(3)(ii) namely equivalent to the amount of duty payable. They have maintained that on the plain language of Rule 96ZO of the Rules, no intention to evade duty or make payment of duty is required to be shown or no fraud, misrepresentation or suppression of facts is required to be proved. It has been highlighted by the learned counsel that the aforesaid situation envisaged by Section 11AC of the Act is not envisaged in Rule 96ZO. They have also submitted that the abatement claims are required to be strictly covered by Rule 96ZO(2) of the Rule and in the absence of fulfilling the requirement of aforesaid provision, no abatement claim could have been granted by the tribunal. Learned counsel have also made submissions on the facts of each case to urge that the abatement claims have been erroneously allowed by the tribunal and the well based findings recorded by the Commissioner have been illegally set aside. In respect of their submissions, they have pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by adopting the same mode especially in the absence of any provision in the statutory Rules. It has further been urged that the tribunal is the last adjudicatory forum for recording of findings on facts and it would not be proper to unsettle those findings. RE: QUESTION NO. 1 16. Having heard the learned counsel for the parties, we are of the considered view that question No. 1 has to be answered against the revenue and in favour of the dealer-respondent. The Trade Notice No. 31/99 dated 10-8-1999 issued by the Commissioner of Central Excise, Chandigarh cannot be applied to the period of 24-1-1988 (Sic) to 9-2-1998 as such trade notice cannot have any retrospective effect. It is well settled that any instructions or bye-law cannot be issued with retrospective effect nor it can be interpreted so as to give retrospective operation. Therefore, the view taken by the tribunal by giving the benefit for the period from 24-1-1998 to 26-1-1998 to the dealer-respondent is not unwarranted. Accordingly, question No. 1 is decided against the revenue and in favour of the dealer-respondent. RE: QUESTION NOS. 2 3 17. However, on the aforesaid two questions, the judgment rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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