M/S. Rajuri Steels Pvt. Ltd vs Commissioner Of Central Excise & ...

[Arising out of Order-in- Appeal No. PBS(313) 117/2004 dtd. 30/8/2004 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Rajuri Steels Pvt. Ltd. : Appellants

VS

Commissioner of Central Excise & Customs, Aurangabad : Respondent

Appearance

None for the Appellant Shri. Ashitosh Nath, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 13/5/2015 Date of decision: 13/5/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. PBS(313) 117/2004 dtd. 30/8/2004 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad, wherein Ld. Commissioner(Appeals) has rejected the appeal of the appellant and upheld the order-in-original dated 22/3/2004. The fact of the case is that the appellant was working under compounded levy scheme as envisaged under Section 3A of the Central Excise Act, 1944. The appellant has not discharged duty liability as fixed under Rule 96ZP(3) of the Central Excise Act, 1944 therefore show cause notice No. JR/SCN/RAJURI/98 dated 2/9/1999 was issued proposing demand of Rs. 1,70,350/- and also for recovery of interest and penalty under Rule 96ZP(3). Adjudicating authority confirmed demand of duty vide order-in-original No. 9/2003 dated 30/6/2003 however appellant has not challenged duty and paid duty without contesting the same. Subsequently, another order-in-original No. 93/2003 dated 22/3/2004 was passed wherein adjudicating authority has demanded interest and equal amount of penalty under Rule 96ZP(3). Aggrieved by the said order in original dated 22/3/2004 appellant filed appeal before the Commissioner(Appeals) for waiver of penalty and interest which was rejected, therefore appellant is before me.

2. When the matter was called for hearing none appeared on behalf of the appellant. It was noticed that this matter was earlier listed on 6/3/2014, 21/4/2014, 11/8/2014, 19/12/2014 and 8/4/2015, however nobody appeared on the said dates, which clearly shows that appellant is not interested in pursuing the appeal. Therefore I proceed to decide the matter on merit.

3. Shri. Ashitosh Nath, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that in the compounded levy scheme envisaged under Section 3A of the Central Excise Act, 1944 reads with Rule, 96ZP(3) of the Central Excise Act, 1944 there is mandatory provision of mandatory interest and equal amount of penalty of the duty amount and no discretion is provided to any authority to reduce or to waive penalty and interest. In support of his submission he placed reliance on following judgments:-

(a) C.C. & C.E. Coimbatore Vs. Kannapiran Steel Re-Rolling Mills[2011(263) E.L.T. 22(S.C.)]

(b) Rajuri Steels Pvt. Ltd. Vs. CCE [2008(225) E.L.T. 189(Bom.)]

(c) Triveni Alloys Ltd. Vs. CESTAT Chennai[2014(306) E.L.T. 617(Mad.)].

He submits that in view of the above cited judgments and as per the plain reading of the provision of Rule 96ZP(3) of the Central Excise Act, 1944 no relaxation is provided for imposition of penalty and interest under the compounded levy scheme.

4. I have carefully considered the submission made by Ld. A.R. and perused the record in the appeal memorandum.

5. There is no dispute that there is a delay in payment of duty under compounded levy scheme as envisaged under Section 3A of the Central Excise Act, 1944. The appellant has not also disputed the duty liability and admittedly paid the same. The penalty and interest were imposed by the adjudicating authority in terms of Rule 96ZP(3) of the Central Excise Act, 1944, which is reproduced below:-

Provided also that where a manufacturer fails to pay the whole of the amount of duty payable for any month by 15th day of such month, as the case may be, he shall be liable to pay:-

(i) the outstanding amount of duty alongwith interest thereon at the rate of eighteen percent, per annum calculated for the period from 16th day of such month till the date of actual payment of outstanding amount; and

(ii) a penalty equal to the amount of duty outstanding from him a the end of such month or five thousand rupees, whichever is greater.

Provided further that if the manufacturer fails to pay the total amount of the duty payable for each of the month from September, 1997 to March, 1998 by the 30th day of April, 1998, he shall also be liable to pay a penalty equal to the outstanding amount of duty as on the 30th day of April, 1998 of five thousand rupees, whichever is greater.

On plain reading of the above provisions, I find that no discretion is provided to any authority either to reduce or to waive penalty and interest in any circumstances, therefore when there is admitted delay in the payment under compounded levy scheme the interest and penalty as provided under above proviso shall unavoidably imposed. On the identical issue Honble Supreme Court in the case of Kannapiran Steel Re-Rolling Mills(supra) held as under:

11. After considering all the concerned aspects, this Court finally held that the plea that Rule 96-ZQ and Rule 96-ZO have concept of discretion inbuilt cannot be sustained meaning thereby that the said Rules are mandatory and there is no discretion available for reducing the penalty. Provisions of Rule 96-ZP being identical and pari material with that of Rule 96-ZQ and Rule 96-ZO, the ratio of the aforesaid decision rendered by Three Judges Bench is squarely applicable to the facts and circumstances of the present case. Consequently, we allow these appeals and set aside the order passed by the High Court as also by the Tribunal and restore the order passed by the adjudicating authority, leaving the parties to bear their own costs.

In view of the above judgments of Honble Apex Court and plain reading of Rule 96ZP(3) of the Central Excise Act, 1944, penalty and interest were rightly imposed by the adjudicating authority and upheld by the Ld. Commissioner(Appeals) which do not require any interference. Therefore impugned order is upheld and appeal filed by the appellant is dismissed.

(Dictated in court)

Ramesh Nair Member (Judicial)

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