COMMISSIONER OF CENTRAL EXCISE Vs. NATIONAL METAL

JUDGEMENT

(1.) THE Revenue has filed the present appeal against Order -in -Appeal No. 592/03 dated 7 -11 -2003.

(2.) SHRI O.P. Arora, learned SDR, submitted that the respondents, M/s. National Metal, manufacture hot -rolled products; that due to financial crises, they did not discharge duty liability in respect of excisable goods cleared during the months June, 2000 to August, 2000 and October, 2000; that as duty amounting to Rs. 3,90,150/ - and penalty Rs. 11,10,374/ - had not been paid by them, an Attachment Order dated 25 -5 -2001 was issued as a consequence to a certificate dated 30 -3 -2001 already issued to them whereby certain machinery, which was used in the manufacture of excisable goods, had been attached; that on appeal, filed by the respondents, the Commissioner (Appeals), under the impugned order, has allowed the appeal holding that for imposing penalty, show cause notice has to be issued first. The learned SDR, further, submitted that Rule 96ZP(3) of the Central Excise Rules, 1944, provides that where a manufacturer fails to pay the whole of the amount of duty payable in any month by 10th day of such month, he shall be liable to pay the outstanding amount of duty along with interest and penalty equal to the amount of duty outstanding from him at the end of such month; that the penalty imposed is mandatory and accordingly, the Deputy Commissioner has rightly issued the order under Section 142 of the Customs Act for the recovery of the duty and penalty; that the Commissioner (Appeals) has wrongly allowed the appeal filed by the respondents as they have so far not paid the amount of penalty; that it has been held by the Larger Bench of the Tribunal in the case of Mohinder Steels Ltd. v. C.C.E., 2002 (145) E.L.T. 290 (Tri. - LB) that the Compounded Levy Scheme for collection of duty based on annual capacity of production under Section 3A of the Central Excise Act and Hot Re -rolling Steel Mills Annual Capacity Determination Rules, 1997 is comprehensive and general provisions in the Central Excise Act and Rules are excluded; that, thus, there was no necessity for issuing a show cause notice for imposing penalty.

(3.) COUNTERING the arguments, Shri K.K. Anand, learned Advocate, submitted that the duty liability is only Rs. 3,90,150/ - which had been paid by them with interest; that the Tribunal has already held in their own case [C.C.E., Indore v. National Metal, 2004 (167) E.L.T. 312 (T)] that "for payment of penalty" even no show cause notice was issued to the respondents before ordering detention of the goods and as such, no detention straightaway could be ordered.