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TMI Blog2013 (1) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order dated 16-12-1998 determined their monthly duty liability at Rs. 42,88,000/- on the basis of 21.44 chambers. This monthly duty liability based on their annual production capacity had been determined by taking into account the length of galleries while determining the production capacity of the stenter. The appellant during April, 1999 to June, 1999 did not discharge their full duty liability and as such, there was short payment of duty to the tune of Rs. 8,64,000/- and also delay in payment of duty amounting to Rs. 1,15,14,516/-. During this period, Rule 96ZQ(5)(ii) provided for penalty equal to the duty liability for failure to discharge duty liability for a particular month by the due date. Accordingly, a show cause notice dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order-in-original dated 8-1-2004. By this time, the judgment of the Larger Bench of the Tribunal in the case of Sangam Processors Bhilwara (supra) had been upheld by the Apex Court vide judgment reported in 2002 (146) E.L.T. 254 (S.C.). Based on the judgment of the Apex Court, Annual Capacity of Production and monthly duty liability on that basis, was re-determined by the Commissioner vide order dated 24-3-2003 by which the duty liability per month was fixed at Rs. 40 lakhs. The Addl. Commissioner in the de novo adjudication order dated 8-1-2004, therefore, dropped the duty demand of Rs. 8,64,000/-, observing that the assessee have already discharged their duty liability in terms of their re-determined capacity and hence, the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion to the Adjudicating Authority to impose lower penalty for delay in discharge of monthly duty liability by due date, had remanded the matter to the respective High Courts for deciding the question of vires of the said rule, that the vires of the penal provisions under Rule 96ZO, ZP and ZQ was decided by Hon'ble Punjab & Haryana High Court in the case of Bansal Alloys and Metals Pvt. Ltd. v. Union of India [2010 (260) E.L.T. 343 (P&H)] wherein it was held that above said rules to the extent of providing mandatory minimum mandatory penalty equal to duty even for slightest bona fide delay without an element of discretion is excessive and unreasonable restriction on fundamental rights and is arbitrary, that same view has been taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be ultra vires by the judgment of Hon'ble Punjab & Haryana High Court in the case of Bansal Alloys & Metals Pvt. Ltd. v. Union of India and by Hon'ble Gujarat High Court in the case of Krishna Processors v. Union of India (supra). The implication of these judgments is that while there is no mandatory penalty equal to the outstanding duty liability at the end of the month even for smallest delay in discharge of duty liability by the due date, some penalty commensurate with gravity of the contravention can be imposed by the adjudicating authority. Thus, in this case, while the penalty of Rs. 1,15,14,516/- looking to the period of delay is excessive, imposition of some penalty for delay in discharge of monthly duty liability by the due date is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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