TRIVENI ALLOYS LTD. Vs. CESTAT

JUDGEMENT

(1.) THIS appeal, filed by the assessee, is directed against the order passed by the Customs, Excise and Service Tax Appellate Tribunal, (in short CESTAT) Chennai in No. E/212/2003/MAS (Final Order No. 128/2006) 2006 (206) E.L.T. 206 (Tribunal). The said appeal was filed before the Tribunal challenging the order passed by the Commissioner of Central Excise, Chennai in Order -in -Original No. 5/2003, dated 20 -2 -2003. The appellant is engaged in the manufacture of Non -alloy Steel, falling under chapter sub -heading 7214.90 of the Schedule to the Central Excise Tariff Act, 1985, covered under Section 3A of the Central Excise Act, hereinafter referred to as the Act, 1944 as well as by the Hot Re -rolling Steel Mills Annual Capacity Determination (HRSMACD Rules, 1997). The appellant had opted for monthly payment of duty under Rule 96ZP(3) of the Central Excise Rules, 1944, hereinafter called as the Rules. The Assistant Commissioner of Central Excise, Chennai -V Division, in his letter dated 30 -9 -1997 fixed the annual production capacity of the appellant. Accordingly, the duty liability of the assessee had been worked out at Rs. 3,61,477/ - per month by the Commissioner. The appellant failed to discharge the duty liability and therefore, a show cause notice dated 21 -7 -1999 was issued demanding payment of differential duty for the period from February, 1999 to June, 1999 as prescribed under Section 11A of the Act besides proposing interest and imposition of penalty under Rule 96ZP(3) of Rules read with Section 3A of the CST Act. A similar notice dated 12 -1 -2000 was issued for the subsequent period from June, 1999 to December, 1999. The appellant did not raise any objection to the show cause notices and therefore, the original authority confirmed the entire demand payable for the period from 1 -2 -1999 to 31 -12 -1999 as proposed in the show cause notice, however, the levy of statutory interest and penalty under Rule 96ZP(3) of the Rules was deferred as per the orders of the Honourable Supreme Court, dated 21 -4 -1998 in Civil Appeal Nos. 52 to 63 of 1998 in the case of Union of India v. Supreme Steels & General Mills and Others, pending finalisation of the proceedings.

(2.) SUBSEQUENTLY , the Honourable Supreme Court, by order dated 15 -10 -2001, disposed of the Special Leave Petitions by upholding the validity of Section 3A of the Act and Rule 96ZO of the Rules as well as the notifications issued thereunder. Consequently, the proceedings in respect of imposition of penalty and interest, which were kept in abeyance, has been taken up for finalisation. At this stage, the appellant raised certain objections before the Commissioner of Central Excise, the second respondent herein, questioning the levy of interest and penalty. In view of the change in Adjudicating Authority, the assessee was provided with a fresh opportunity of hearing on 7 -1 -2003 and 18 -2 -2003, however, the appellant did not utilise those opportunities given to him. Consequently, the second respondent, by order dated 20 -2 -2003 imposed penalty of Rs. 33,27,334/ - under Rule 96ZP(3) of the Rules, with interest at the rate of 18% on Rs. 33,27,334/ - as per Rule 96ZP(3) of the Rules. As against the said order, the appellant preferred the appeal before CESTAT.

(3.) THE CESTAT, considering the submissions made on either side taking note of the fact that the appellant did not file any appeal as against the final order dated 10 -5 -2002 passed by the original authority. However, while considering the levy of penalty, the Tribunal observed that it has power to impose lesser penalty than the maximum on a defaulting assessee under the compounded levy scheme and the imposition of penalty of Rs. 33 lakhs on the appellant is too harsh. Accordingly, by the order dated 20 -2 -2003, the Tribunal reduced the penalty imposed by the second respondent to Rs. 10 lakhs as against Rs. 33 lakhs. Aggrieved by the said order dated 20 -2 -2003 of the Tribunal, the present Civil Miscellaneous Appeal is filed. However, the Revenue has not filed any appeal against the reduction of the quantum of penalty.