Central Excise Appeal No.9 of 2011 -1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Central Excise Appeal No.9 of 2011(O&M) Date of decision: 27.4.2011 Commissioner of Central Excise Commissionerate, Ludhiana ...Appellant Versus M/s Hari Om Castings ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Gurpreet Singh, Senior Standing Counsel for the appellant. **** ADARSH KUMAR GOEL, J ( Oral) . 1. This appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944 (for short “the Act”) against the order dated 15.12.2009 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short “the Tribunal) raising following substantial questions of law:- “1. Whether the CESTAT is correct in quashing the penalty for the period prior to Ist May, 1998 imposed under the provisions of law which are clear and unambiguous? 2. Whether the CESTAT is correct in setting aside the penalty for the period prior to Ist May, 1998 without negating the provisions of Rules 173Q of the Rules which also empowers the authority to impose equal penalty?” Central Excise Appeal No.9 of 2011 -2- **** 2. The assessee is covered by the scheme of levy of excise duty under Section 3A of the Act. The revenue initiated action for recovery of delayed payment of duty. After adjudication, the Adjudicating Authority vide order-in-original dated 9.4.2003 confirmed the demand of duty with interest and also imposed penalty. The order was upheld by the Commissioner(Appeals) vide order dated 29.1.2004. On further appeal, the Tribunal quashed the penalty for the period prior to 1.5.1998 on the ground that penalty provisions were incorporated with effect from 1.5.1998 only and could not be applied for period prior thereto The relevant observations:- “As regards, the ground relating to the penalty, undoubtedly the period involved is from September 1997 to December, 1998. The provision relating the penalty under Rule 96ZO(3) of the said rules came into force w.e.f. 1st May, 1998. Obviously such a penal provision cannot be presumed to be retrospectively enforceable. Being so, the appellants are justified in contending that the authority could not have imposed equal amount of penalty for the period prior to Ist May, 1998 that is for the period from September, 1997 till April, 1998. Neither the Commissioner (Appeals) nor the Adjudicating Authority has considered this aspect of the matter while imposing the penalty. Considering the provisions of law comprised under Rule 96ZO(3) of the said Rules and that the penal provision is not being retrospectively enforceable, the Central Excise Appeal No.9 of 2011 -3- **** penalty imposed for the period prior to April, 1998 has to be quashed. The decision of the Tribunal in Hindustan Processors Ltd. undoubtedly is to the effect that the mandate of the law laid down by Apex Court in Dharamendra Textile Processors case would apply even in the cases under 96ZO(3). However, it is pertinent to note that the decision was in relation to the period from December, 1998 onwards i.e. from the time the penal provision had come into force. That by itself cannot be construed to mean that such penal provision could be retrospectively enforceable.” 3. We have heard learned counsel for the appellant. 4. It is not disputed that the provision for levy of penalty for mere delay in payment for the period came into force only on 1.5.1998. Rule 173Q was applicable only for deliberate evasion. On these admitted facts, the finding recorded by the Tribunal has not been shown to be perverse in any manner. 5. No substantial question of law arises in this appeal. The appeal is dismissed. (Adarsh Kumar Goel) Judge April 27, 2011 (Ajay Kumar Mittal) Pka Judge