1 CEXA NO.13 OF 2006 lgc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CENTRAL EXCISE APPEAL NO.13 OF 2006 The Commissioner of Central Excise Thane-II : Appellant. Versus M/s.Eden Textronics Pvt. Ltd. : Respondent. Mr.Pradeep S Jetly a/w Mr. J B Mishra APP for the Appellant. Mr. S P Mathew a/w Mr. Nitin S Dhumal for the Respondent. CORAM :- V.C.DAGA & R.M.SAVANT,JJ. DATE :- 14th September ,2010 P.C. 1 Heard learned counsel for the Revenue and the learned counsel for the Respondent. 2 This Appeal is directed against the order dated 30.6.2005 passed by the Customs Excise & Gold (Control) Appellate Tribunal, West Regional Bench, at Mumbai wherein the amount of penalty is reduced to the minimum of Rs.5000/- under Rule 96ZQ(5) of the Central Excise Rules 1944. 3 This Appeal was admitted by an order dated 6.3.2006 to consider the following substantial question of law :- “Whether on the facts and in the circumstances of the case, CESTAT is correct in law in reducing the penalty imposed under Rule96ZQ(5)(ii) of the Central Excise Rules, 1944. 2 CEXA NO.13 OF 2006 4 During the pendency of this Appeal, the Apex Court was pleased to settle the issue relating to the penalty in the case of Union of India v/s Dharamendra Textile Processors reported in 2008(231) E.L.T. 3 (SC) and the subsequent judgment in the case of Union of India v/s. Krishna Processors reported in 2009(237) E.L.T. 641 (SC); wherein the Court ruled that there is no power in the authority to reduce the amount of penalty. 5 Following the aforesaid law laid down by the Apex Court, the learned Division Bench of this Court has also taken a similar view while interpreting the said Rule 96ZQ(ii) of the Central Excise Rules in the case of Commissioner of Central Excise, Thane-II v/s Visen Fabrics reported in 2010 (25) ELT 354 (Bom.). 6 In the above case, the learned Division Bench of this Court found futility of remanding the matter to the Tribunal for consideration afresh and chose to determine and impose penalty in terms of the above two Judgments of the Apex Court. 7 Mr.Jetly, the learned counsel for the Revenue relying on the aforesaid judgment of the learned Division Bench of this Court urged that the same view should be taken in this case and the amount of penalty should be determined equal to the amount of duty liability found payable. 3 CEXA NO.13 OF 2006 8 Per contra, Mr. Mathew, learned counsel appearing for the Respondent submits that so far as second payment of excise duty in the sum of Rs.4,06,452/- is concerned, it was supposed to be made by the Respondent on or before 15.5.1999, but it was actually paid by the Respondent by depositing a cheque on 13.5.1999. The cheque has actually been debited to the account of the Respondents on 14.5.1999 and consequent credit was given to the collecting Bank on 15.5.1999 though the challan was issued showing the date of the receipt of the amount as 17.5.1999. He, thus, submits that there was no delay in making second payment of Rs.4,06,452/-. In his submission payment by cheque relates back to the date of cheque on its realisation. In support of his submission he relied upon the law laid down by the Apex Court in the case of Jiwanlal Achariya Vs. Rameshwarlal Agarwalla reported in AIR 1967 SC 1118 and in the case of K. Saraswathy alias K. Kalpana Vs. P.S.S. Somasundaram Chettiar reported in (1989) 4 SCC 527. He submits that the amended Explanation to Rule 8 saying deposit of cheque or date of presentation of the cheque in the Bank designated by the Central Board of Excise and Customs for the purpose of payment of excise duty shall be deemed to be the date on which duty has been paid subject to realisation of that cheque has been to give effect to the law laid down by the Apex Court. 9 Mr.Jetly submitted that this rule has come into effect with effect from 1.3.2007 and as such it is not applicable to the facts of the present case. 4 CEXA NO.13 OF 2006 Mr. Jetly appears to be right. 10 At any rate, the Supreme Court in the above cited cases has followed the law laid down in the case of CIT Vs. Ogle Glass works Ltd. reported in AIR 1954 SC 429; wherein it was laid down that payment by cheque realised subsequently on cheque being honoured and encashed relates back to the date of receipt of the cheque. 11 In the above matter, we allow this Appeal and answer the question of law in favour of the Revenue and against the Assessee. However, for determination of the quantum of penalty we remand the matter back to the Tribunal for consideration afresh in the light of the factual senario emerging in the case applying the law laid down by the Apex Court cited supra. The Tribunal shall go into the factual aspect of second payment of duty and shall determine the quantum of penalty to be recovered from the Respondent- assessee in accordance with law. Rival contentions on this count are kept open. No order as to costs. (R.M.SAVANT,J.) (V.C.DAGA,J.)