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TMI Blog2004 (2) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... o pass an order of remand to the Tribunal, it is not necessary to set out all the facts in detail. Suffice it to state that by order dated 25-8-1999, the Commissioner of Central Excise levied central excise duty to the tune of Rs. 14,36,74,091/- and an identical sum was directed to be paid by way of penalty under Section 11AC of the Central Excise Act read with Rule 173Q(1) of the Rules. Interest at the rate of 20% per annum was also levied. 3.The petitioner - Indian Oil Corporation, a public sector undertaking, had paid the entire amount of excise duty by the time the appeal reached hearing before the Tribunal. The Court is also informed that the petitioner also paid the entire amount of interest levied on the said excise duty. Hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) E.L.T. 52. The Tribunal thereafter gave the following reasons for upholding the penalty of Rs. 45,87,732/-. (i) Taking note of the total amount of duty evaded, namely, more than Rs. 14 crores imposition of penalty of Rs. 45,87,732/- cannot be considered as unconscionable or too harsh; (ii) The attempt of the assessee to show that there was no evasion of duty disentitling claim of Modvat under Rule 57E was not examined on the ground that the Committee on Disputes had permitted only challenge to the legality of penalty and not legality of imposition of duty. The petitioner has, therefore, filed the present petition under Article 226 of the Constitution challenging the order of the Tribunal. 4.Mr. B.T. Rao, learned Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was initially disputed by the petitioner and not paid before filing of the appeal, the Tribunal was justified in upholding the penalty on the ground that it was not unconscionable or too harsh to warrant interference of the Tribunal. As regards the second contention, it is submitted that since the Committee on Disputes had permitted the petitioner to challenge only the penalty levied by the impugned order and not the excise duty, it was not open to the petitioner to urge any contention which would have any bearing on the question of payment or non-payment of excise duty. 6.Having heard the learned Counsel for the parties, there appears to be some substance in the first contention, but we express no final opinion on the said contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Court held that penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation. Hence, in this sense it would be necessary for the Assessing authority or the Tribunal to consider before imposing or upholding penalty, whether the assessee's case regarding its/his duty liability was bona fide, even if it was not accepted on merits. If the assessee's interpretation of a statutory provision or a technical matter (having a bearing on the tax liability) is not accepted and the departmental authorities levy, duty and penalty, when the Tribunal considers whether to uphold or set aside the penalty, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Committee on Disputes to challenge the differential excise duty because the assessee had already paid the differential excise duty. In our view, when the Committee on Disputes permitted the assessee to challenge the imposition of penalty, the Tribunal could not have prevented the assessee from urging all available contentions to show that there was no fraud, collusion or any wilful misstatement or suppression of facts and that even if there was any contravention of any of the provisions of the Act or the Rules, it was not done with intent to evade payment of duty. 9.In view of the above discussion, we quash and set aside the judgment and order dated 23-3-2001 insofar as the Tribunal has upheld the imposition of penalty to the tune ..... X X X X Extracts X X X X X X X X Extracts X X X X
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