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TMI Blog2008 (3) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... es of each case – Decision of the Tribunal upheld – revenue appeal dismissed. - 1032 & 1033 of 2008, 1 & 2 of 2008 - - - Dated:- 24-3-2008 - K. Raviraja Pandian and P.P.S. Janarthana Raja, JJ. C.M.A. Nos. 1032 1033 of 2008 and M.P. Nos.1 2 of 2008, Shri T. Chandrasekaran, for the Appellant. [Judgment per : K. Raviraja Pandian, J.]. - The Department has filed these appeals by formulating the following questions of law:- "(1) Whether the Judgment relied by the Tribunal reported in 1998 (99) E.L.T. 33 (S.C.) is applicable to the instant case? And (2) Whether the order of the Customs, Excise and Service Tax Appellate Tribunal in reducing the penalty is in terms of Rule 96ZO of the Central Excise Rules, 1944, is sustainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r appeal to the CESTAT against the quantum of penalty so sustained among other things. The CESTAT by its order No. 975 of 2004, dated 8-11-2004, [2005 (180) E.L.T. 110 (Tri.)] reduced the penalty to a sum of Rs. 25,000/- while confirming the other aspects of the issue. That order of the Tribunal reducing the penalty to Rs. 25,000/- is put in issue in these appeals before us by formulating the above questions of law. 3. We heard the argument of the learned counsel for the appellant. 4. Rule 96ZP(3) reads as follows:- ".....[Provided also that where a manufacturer fails to pay the whole of the amount of duty payable for any month by the 10th day of such month, he shall be liable to pay,- (i) the outstanding amount of duty along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, if any, under subsection (4) of the Section 3A of the Central Excise Act, 1944 (1 of 1944): Provided that for the month of September, 1997 the Commissioner may allow a manufacturer to pay the sum of rupees five lakhs by the 30 th day of September, 1997: Provided further that if the capacity of the furnaces installed in a factory is more than or less than 3 metric tonnes, or there is any change in the total capacity, the manufacturer shall pay the amount, calculated pro rata: [Provided also that where a manufacturer 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, he shall be liable to,- (i) pay the outstanding amount of duty along with interest thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t agree with this submission. The penalty has to be imposed whenever the manufacturer fails to pay the amount of duty for any month by the 10th of such month. This is the clear mandate of the fourth proviso to Rule 96ZP(3) of the Central Excise Rules. The imposition of penalty has nothing to do with the timing of the show cause notice. 7.In our opinion the CEGAT has been lenient by reducing the penalty which strictly speaking it could not do because the fourth proviso to Rule 96ZP(3) does not say that the 'maximum' penalty can be up to the amount of the duty outstanding. It says that the penalty would be equal to the amount of duty outstanding. Hence, the Tribunal has been over indulgent to the assessee by reducing the penalty, which it s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to ten times the amount of entry tax whenever the provisions of Section 7(5) are attracted. Depending upon the facts of each case the assessing authority has to decide as to what would be the reasonable amount of penalty to be imposed, the maximum being ten times the amount of the entry tax. So construed, sub-section (5) of section 7 cannot be regarded as confiscatory. Consequently, this also cannot be a ground for holding Section 7(5) to be ultra vires. 13. From the aforesaid it follows that Section 7(5) has to be construed to mean that the presumption contained therein is rebuttable and secondly the penalty of ten times the amount of entry tax stipulated therein is only the maximum amount which could be levied and the assessing autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for redemption of fine in lieu of confiscation and also levy of penalty for improper importation of goods under Section 112(a) of the Customs Act, 1962, this Court has taken the same view in T.C. (A) Nos.127 to 130 of 2008, dated 31-1-2008 [2008 (226) E.L.T. 486 (Mad.)] as the one taken by the Supreme Court. 11. In view of the above and in the light of the law enunciated by the Supreme Court in the case of State of Madhya Pradesh v. Bharat Heavy Electricals reported in 1998 (99) E.L.T. 33 (S.C.), we are of the view that there is no question of law much less substantial question of law for entertaining these appeals. Hence, the appeals are dismissed. No costs. Consequently, connected miscellaneous petitions are also dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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