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PJ/Case Laws/2012-13/1359

Whether Penalty under Rule 26 is in excess of rule making power conferred under section 37 of the Central Excise Act?


Case:-PROMPT CASTINGS PVT. LTD. Versus JOINT COMMISSIONER OF CENTRAL EXCISE, KOLKATA-IV
 
CITATION:- 2012 (284) E.L.T. 641 (Cal.)

Brief Facts:-This writ petition is directed against an order bear­ing the number 04/Joint Commr./CE/Kol-IV/Adjn/2010, dated 30th November, 2010/22nd December, 2010 passed by the Joint Commissioner of Central Excise, Kolkata-IV Commissionerate, imposing, inter alia, penalty only on the petitioner-company of Rs. 9,00,790/- and each of the petitioner num­bers 2 and 3 being Directors of the petitioner-company of Rs. 9,34,430/-.
 
Reasoning of Judgment:-Section 11AC of the Central Excise Act, 1944, provides for imposition of penalty on the person who is liable to pay duty as determined under sub­section (2) of Section 11A. Rule 26 of the Central Excise Rules which provides for imposition of penalty on any person who acquires possession of, or is in any way concerned with transporting, removing, depositing keeping, concealing, selling or purchasing, or in any other manner dealing with any excisable goods that are liable to confiscation, is prima facie ultra vires of Section 11AC of the Central Ex­cise Act, 1944. It is well settled that no penalty can be levied save by authority of law - Rule 26 is prima facie in excess of the Rule making power conferred under the Central Excise Act, 1944.
 
There will be an interim order restraining the respondents from giv­ing further effect to the impugned letter dated 13th December, 2011 being part of the Annexure 'P-6' to the writ petition.
 
Affidavit in opposition be filed within 4th October, 2012. Affidavit in reply thereto, if any, be filed within 18th October, 2012.
 
Matter be listed as 'For Hearing' on 20th November, 2012.
 
The interim order shall remain in force till 17th December, 2012 or until further orders whichever is earlier.
 
All parties are to act on a signed photocopy of this order on the usual undertakings.
 
Decision:-Case Adjourned.

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