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TMI Blog2002 (7) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... riff Act. The petitioner is not engaged in any business of purchase and sale of excisable goods or fabrics. The Government of India has presented excise duty known as compounded levy, at the rate of Rs. 1,50,000 regardless of the job work done by the machines. Rule 96ZQ(3), of the Central Excise Rules, 1944 provided for levy of compounded duty which has to be paid by 5th of every month in advance. The Rule 96ZQ(5) provides as below : "If an independent process or fails to pay the amount of duty or any part thereof by the date specified in sub-rule (3), he shall be liable to : (i) pay the outstanding amount of duty along with interest at the rate of thirty-six per cent per annum calculated for the outstanding period on the outstanding amount; and (ii) a penalty equal to an amount of duty outstanding from him at the end of such month or rupees five thousand, whichever is greater." 4.From 1st April, 2000 the due dates for payment of compounded levy were revised and as per the amended provisions of Rule 96ZQ(3), 50 per cent of the duty payable for a month was to be paid by 15th of the month and the balance 50 per cent by the end of the relevant month. 5.For the period of 16th Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Writ Petition No. 206 of 2000 before Delhi High Court where interim order dated 4th January, 2000 and 14th February, 2000 (Annexures 9 and 10). Similarly, a Writ Petition No. 1961 of 1999 was filed before Rajasthan High Court, in which also the validity of the 'Rules' and the 'Notification' were challenged and Rajasthan High Court has passed an order on 10th May, 1999 restraining the Central Excise Department from taking any coercive steps for making the recoveries in accordance with Rule 96ZQ. 8.It has been contended on behalf of the petitioner that the impugned order dated 28th June, 2002 is not a speaking order and the merits of the case was not considered therefore, order is not sustainable, more so without keeping in mind the financial difficulties of the petitioner, the above order has been passed. 9.It has been contended on behalf of the learned Counsel for the petitioner that in 1998 (98) E.L.T. 350 (Cal.), Tata Iron and Steel Co. Ltd. v. Commissioner (Appeals), Central Excise, Calcutta, it was held that one of the relevant factors which is required to be considered by the Appellate Authority under Section 35F of the Act is prima facie case on merits and such other rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant before passing the order to produce material in support of its claim as the appellant had very good case on merits and if the stay as prayed for was not granted it might great irreparable loss/ injury and hardship to the appellant, therefore, the Court felt it was expedient in the interest of justice to remand the matter to the Appellate Authority for fresh disposal of the stay application after affording an opportunity to the parties to produce material/evidence in support of the grounds taken in the stay application. 14.In M.C. Geel's v. Union of India, 1988 (35) E.L.T. 449 dealing with the Excise and Customs Act. It was observed that Section 129E of the said Act had almost similar provisions as contained in Section 35F of the Central Excise Act had almost similar provisions as contained in Section 35F of the Central Excise Act. Proviso to Section 129E is identical to the proviso to Section 35F of the Central Excise Act. In both the provisos it is mentioned that the person desirous of appealing against the order shall, pending the appeal deposit with the proper officer the duty demanded or the penalty levied. Provisos to Section 129E of the Customs Act as well as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merits and if appellant has such a strong prima facie case then he is most likely to be exonerated him from payment and the Tribunal if still insist on pre-deposit of the amount that would amount to undue hardship. 19.In the case of State of M. P. v. Bharat Heavy Electricals Ltd., 1998 (99) E.L.T. 33 (S.C.), the Supreme Court has examined the expression "shall be liable to pay penalty equal to ten times the amount of entry tax" in Section 7(5) of the M. P. Entry Tax Act, 1976. The Supreme Court held that the penalty for violating the provisions of Entry Tax is the maximum and not a fixed rate of penalty the penalty imposed under the Entry Tax Act in M. P. is not confiscatory in nature. An assessee is always liable to explain the circumstances and satisfy the genuine reasons forcing the assessee of not complying with the law in letter and spirit in such cases, the penalty can be waived or token penalty can be imposed by the authority. The Supreme Court thus held that the penalty is not automatic under the statute. 20.The Hon'ble Supreme Court in the case of Pratibha Processors v. Union of India, 1996 (88) E.L.T. 12 (S.C.) observed that penalty is ordinarily levied for some contum ..... 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