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TMI Blog2013 (10) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... d to default “with intent to evade duty” - The writ petitions of the assessees were allowed and impugned provisions in Rules 96(ZO), (ZP) and (ZQ) permitting minimum penalty for delay in payment, without any discretion and without having regard to extent and circumstances for delay are held to be ultra vires the Act and the Constitution - In CWP No. 8555 of 2010, penalty had been sustained by the Tribunal to the extent of 100% which will stand quashed without prejudice to any fresh order being passed in accordance with - Krishna Processors v. Union of India [2012 (11) TMI 954 - GUJARAT HIGH COURT ]. The provision for minimum mandatory penalty equal to the amount of duty even for slightest bona fide delay without any element of discretion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arging duty liability on the basis of their monthly duty liability determined by the Commissioner based on their annual capacity of production. The monthly duty liability as per the provisions of the rules was being discharged in two fortnightly instalments. The appellant during the period of dispute failed to discharge their fortnightly duty liability by the due date. Though the duty liability was discharged along with interest for the period of delay, there was, as such, delay in the discharge of duty liability for certain fortnights. During the period of dispute, as per the provisions of Rule 96ZO(3), which came into effect from 1-5-1998, an assessee operating under Rule 96ZO was required to discharge the duty liability for each fortnigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal and the Tribunal vide Final Order dated 26th February 2009 set aside the Commissioner (Appeals) s order and remanded the matter again for deciding afresh in the light of certain directions in the order. In the remand proceedings, the Commissioner (Appeals) vide order dated 24-2-2010 confirmed the penalty to the extent of Rs. 1,04,16,070/- and dropped the penalty to the extent of Rs. 20,83,334/- on the ground that the same pertains to delay in discharge of fortnightly duty liability for the period prior to 1-5-1998 when Rule 96ZO(3)(ii) was not there. Against this order of the Commissioner (Appeals), this appeal has been filed by the appellant. 2. Heard both the sides. 3. Shri Balbir Singh, Advocate, the learned Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first fortnight and the duty had been paid during the same month along with interest, and that in view of this, the impugned order is not sustainable. 4. Shri S.R. Meena, the learned Departmental Representative, defended the impugned order relying upon the Apex Court s judgment in the case of Union of India v. Dharamendra Textile Processors (supra) and pleaded that in view of the provisions of Rule 96ZO(3)(ii) as interpreted by the Apex Court in the case of Union of India v. Dharamendra Textile Processors (supra), in case an assessee delayed the payment of duty for a particular month or fortnight by the due date, he was liable to pay penalty equal to the outstanding duty amount or Rs. 5,000/- whichever is greater and that the Adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... safeguard the revenue against loss, if any. The penalty has been provided in addition to interest. Mere fact that without mens rea, one can be punished or a penalty could be imposed is not a blanket power without providing for any justification. In the Indian Constitutional scheme, power of legislature is circumscribed by fundamental rights. Judicial review of legislation is permissible on the ground of excessive restriction as against reasonable restriction which is also described as proportionality test. Conclusion 16. For the above reasons, we hold that the impugned provision to the extent of providing for mandatory minimum penalty without any mens rea and without any element of discretion is excessive and unreasonable restriction on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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