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TMI Blog2019 (1) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s Fibre Boards(P) Ltd., Bangalore Vs. Commissioner of Income Tax, Bangalore,[2015 (8) TMI 482 - SUPREME COURT] has held that omission of Section 3A of the said Act by Section 131 of the Finance Act, 2001, without any saving clause would not affect the proceedings in respect of which action has already been initiated - Hon'ble Apex court held that omission would amount to a repeal for the purpose of General Clauses Act, 1897 and, therefore, even after omission Section 3A of the said Act w.e.f. 11.5.2001, pending proceedings would remain unaffected. In terms of the ruling of the Hon'ble Apex Court in M/s Shree Bhagwati Steel Rolling Mill demand or levy in excess of ₹ 5000/- (Rupees five thousand only) would amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r seeking enhancement of penalty imposed by the commissioner, came to be rejected. 5. In these matters, the Deputy Commissioner of Central Excise issued five show cause notices to the respondent/Assessee demanding central excise duty short paid under the provisions of 11A of the Central Excise Act 1944( said Act ) read with Rule 96 ZO(3) of the Central Excise Rules 1944 ( said Rules ). 6. By an order dated 28.8.2003, the Commissioner of Central Excise confirmed demand made in show cause notices; imposed penalties of ₹ 1,00,000'-(Rupees one lakh only) each upon the Assessee in respect of show cause notices and ordered, respondent/Assessee to pay interest on the duties @18% per annum from the date of such amount became due and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vijaya Steel Ltd.,Vs CCE, Bangalore-II (2006(76) RLT 264 (CESTAT-Bang.), it was held that in view of the various judgments, show cause notice cannot be confirmed by the Commissioner when the provisions of law have been deleted. Inasmuch as in the present case the impugned order was passed subsequent to omission of Section 3A with effect from 18/05/2001, the impugned order confirming demand of duty is required to be set aside, in the light of the Tribunal's decision discussed supra. We, accordingly, allow the appeal filed by Shivan Ispat Pvt. Ltd. 10. The appellant/Revenue has instituted Excise Appeal No. 4/2007 challenging the impugned order to the extent the same allows Assessee Appeal No.E/3751/2003 and Excise Appeal No.3/2007, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 4 of 2007 instituted by the appellant/Appeal is required to be allowed. 14. In so far as Excise Appeal No.3 of 2007, again, instituted by appellant/Revenue is concerned, as noted earlier, the same is against CESTAT's impugned order to the extent the same rejects the Revenue Appeal no.E/2971/2004, in which, the Revenue had sought for enhanced penalty equivalent to confirmed demand. 15. In M/s Shree Bhagwati Steel Rolling Mill(supra), one of the issues which fell for consideration before the Hon'ble Apex Court was whether any penalty in excess of ₹ 5,000/-(Rupees five thousand only) in terms of levy of Rules 96ZO, 96ZP, 96ZQ would be ultra vires the said Act as well as violative of Articles 14 and 19 (1)(g) of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, levy a penalty of say ₹ 25,00,000/- or ₹ 50,00,000/-. This being the position, it is clear that when contrasted with the provisions of the Central Excise Act itself, the penalty provisions contained in Rules 96ZO, 96 ZP and 96 ZQ are both arbitrary and excessive. 39. A penalty can only be levied by authority of statutory law, and Section 37 of the Act, as has been extracted above does not expressly authorize the Government to levy penalty higher than ₹ 5,000/-. This further shows that imposition of a mandatory penalty equal to the amount of duty not being by statute would itself make rules 96ZO, 96 ZP and 96 ZQ without authority of law. We, therefore, uphold the contention of the assessees in all these cases and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia. 18. Therefore, both these Appeals are disposed of by making following order:- ORDER i. Excise Appeal No. 3/2007 is dismissed; ii. Excise Appeal No. 4/2007 is partly allowed. iii. The impugned order dated 23.10.2006 made by the CESTAT, to the extent the same allows the respondent/Assessee's Appeal no.E/3751/2003 is quashed and set aside. The respondent/Assesee's Appeal no.E/3751/2003 is restored to the file of CESTAT and the CESTAT is directed to dispose of the same on its own merits and in accordance with law. iv. All contentions of the parties, except, contention based upon the omission to Section 3A of the said Act are left open to be decided by CESTAT. v. In the facts and the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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