Commissioner of C. Ex. Vs. Sada Shiv Castings Ltd. - Court Judgment

Excerpt:
1. in these two appeals the revenue is praying for imposition of penalty on both the respondents namely, m/s. sada shiv castings ltd. & m/s. chandigarh ispat ltd. under rule 96zo/zp of the central excise rules, 1944.2. shri vikas kumar, learned sdr, submitted that both the respondents were liable to pay duty under section 3a of the central excise act; that the central excise duty as determined was not paid by both the respondents; that the dy. commissioner under order-m-original no.183-187/2002, dated 21-8-2002 imposed a penalty of rs. 2.5 lakhs on m/s. sada shiv castings ltd. and penalty of rs. 1 lakh on m/s.chandigarh ispat ltd.; that, however, the commissioner (appeals) under the impugned order has set aside the penalties observing that the delay in depositing the duty was due to confusion at the prevailing time as well as due to the litigation regarding the validity of compounded levy claim challenged in various high courts. the learned sdr submitted that the mens rea is not pre-requisite for imposing penalty under rule 96zo/96zp; that as the duty was not discharged by the respondents on due dates penalty is imposable on both of them.3. on the other hand shri balbir singh, learned advocate, submitted that payment of duty was not paid on account of litigation going in high courts; that as soon as the position was clear they had discharged the duty liability along with interest, and therefore, no penalty is imposable on them.4. we have considered the submissions of both the sides. it is the requirement of the law that the excisable goods are removed from the place of manufacture only after discharging the duty liability thereon.on query from the bench the learned advocate has informed that both the respondents were not parties to the court cases referred to by him nor was there any stay order staying the payment of duty by them. it is an admitted position that the goods were cleared without discharging the duty liability on the due dates. the respondents are, therefore, liable to penalty under rule 96zo/96zp of the central excise rules, 1944.however, taking into consideration the fact that as soon as the stays given to other parties were vacated the respondents have discharged their duty liability along with interest, we hold that a penalty of rs. 20,000/- on each respondent will meet the ends of justice. we order accordingly. the appeals are disposed of in these terms.

Judgment:
1. In these two appeals the Revenue is praying for imposition of penalty on both the Respondents namely, M/s. Sada Shiv Castings Ltd. & M/s. Chandigarh Ispat Ltd. under Rule 96ZO/ZP of the Central Excise Rules, 1944.

2. Shri Vikas Kumar, learned SDR, submitted that both the Respondents were liable to pay duty under Section 3A of the Central Excise Act; that the Central Excise duty as determined was not paid by both the Respondents; that the Dy. Commissioner under Order-m-Original No.183-187/2002, dated 21-8-2002 imposed a penalty of Rs. 2.5 lakhs on M/s. Sada Shiv Castings Ltd. and penalty of Rs. 1 lakh on M/s.

Chandigarh Ispat Ltd.; that, however, the Commissioner (Appeals) under the impugned Order has set aside the penalties observing that the delay in depositing the duty was due to confusion at the prevailing time as well as due to the litigation regarding the validity of compounded levy claim challenged in various High Courts. The learned SDR submitted that the mens rea is not pre-requisite for imposing penalty under Rule 96ZO/96ZP; that as the duty was not discharged by the Respondents on due dates penalty is imposable on both of them.

3. On the other hand Shri Balbir Singh, learned Advocate, submitted that payment of duty was not paid on account of litigation going in High Courts; that as soon as the position was clear they had discharged the duty liability along with interest, and therefore, no penalty is imposable on them.

4. We have considered the submissions of both the sides. It is the requirement of the law that the excisable goods are removed from the place of manufacture only after discharging the duty liability thereon.

On query from the Bench the learned Advocate has informed that both the Respondents were not parties to the Court cases referred to by him nor was there any stay order staying the payment of duty by them. It is an admitted position that the goods were cleared without discharging the duty liability on the due dates. The Respondents are, therefore, liable to penalty under Rule 96ZO/96ZP of the Central Excise Rules, 1944.

However, taking into consideration the fact that as soon as the stays given to other parties were vacated the Respondents have discharged their duty liability along with interest, we hold that a penalty of Rs. 20,000/- on each Respondent will meet the ends of justice. We order accordingly. The appeals are disposed of in these terms.