- (1.) This appeal has been preferred proposing following substantial questions of law: (a) Whether Commissioner/Tribunal has discretion to reduce the mandatory penalty under the provisions of Rule 96ZO(3)? (b) Whether penalty imposed under Rule 96ZO(3) upon a manufacturer of non-alloy steel ingots falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and who opted to pay duty under Section 3A of the Central Excise Act, 1944 read with Induction Furnace Annual Capacity Determination Rules, 1997 but failed to pay the whole of the amount payable for any month by the 15th day or the last day of such month, as the case may be, is mandatory or discretionary in nature?
(2.) The respondent-assessee is engaged in manufacture of non alloy steel ingots falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 which were chargeable to duty upto 31.3.2000 in terms of Section 3A of the Central Excise Act, 1944 (in short, 'the Act') read with Notification No. 30/97-CE (NT) dated 1.8.1997. The assessee opted to pay duty on lump sum basis in terms of Rule 96ZO(3) of the Central Excise Rules, 1944 (in short, 'the Rules'). Monthly liability of the assessee was determined at Rs. 5 lacs, which was to be discharged into two instalments, first instalment by 15th of the month and second instalment by the last day of the month. During the month of December 1997, the assessee failed to discharge its liability. Show cause notice for recovery of Rs. 1,12,903/- with interest and penalty under Rule 96ZO(3) of the Rules was issued. After considering the defence of the assessee, the duty alongwith interest and penalty of Rs. 1,12,903/-was confirmed. The assessee preferred an appeal.
(3.) The Commissioner (Appeals) reduced the penalty to Rs. 30000/-. The Tribunal dismissed the appeal of the revenue following judgment of the Allahabad High Court in Pee Aar Steels (P) Ltd. v. Commissioner of Central Excise, Merrut observing that imposition of penalty being discretionary, no interference was called for.;