2013 (1) TMI 248

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..... without any element of discretion is excessive and unreasonable restriction on fundamental rights is arbitrary. Moreover, exercise of such power by way of subordinate legislation is not permissible when rule making authority for levying penalty is limited to default “with intent to evade duty”. The aforesaid finding by implication means that the adjudicating authority have discretion to impose lower penalty in case of failure of the assessee to discharge the obligation of duty liability by the due date. The excise duty was paid by the appellant though after due date but the payment was made much before issue of SCN. Thus there is no justification for imposing penalty equivalent to duty not paid within due date. Accordingly, taking into acc .....

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..... Court and the Hon'ble High Court in the case of Bansal Alloys & Metals Pvt. Ltd. v. UOI - 2010 (260) E.L.T. 343 (P & H) holding this rule to be ultra vires observed that adjudicating authority have discretion to impose lower penalty in the case of failure of the assessee to discharge duty liability by due date. The same view has been taken by the Hon'ble Gujarat High Court in the case of Krishna Processors v. UOI reported in 2012 (280) E.L.T. 186 (Guj.). In this case therefore the Commissioner's order imposing penalty equal to the duty paid after due date is not correct particularly when almost entire interest on late payment of duty was deposited before issue of show cause notice. Thus he has pressed for setting aside the impugned order. .....

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..... ZO(3) of the Central Excise Rules to the extent of providing for mandatory minimum penalty without any men rea and without any element of discretion is excessive and unreasonable restriction on fundamental rights is arbitrary. Hon'ble High Court further observed that, moreover, exercise of such power by way of subordinate legislation is not permissible when rule making authority for levying penalty is limited to default "with intent to evade duty". The aforesaid finding by implication means that the adjudicating authority have discretion to impose lower penalty in case of failure of the assessee to discharge the obligation of duty liability by the due date. In the instant case, admittedly the excise duty was paid by the appellant though aft .....

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