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Judgment
Sl. No.,Order-in-Original No.,Amount deposited,
,,Interest (Rs.),Penalty (Rs.)
1,105/2000 dt.07.04.2000,,"3,500/-
2,190/2000 dt. 30.05.2000,"7,62,567/-","2,000/-
3,260/2000 dt.07.09.2000,,"1,500/-
4,326/2000 dt.16.10.2000,"3,00,000/-","3,000/-
5,281-285/99 dt.07.10.1999,,"15,000/-
,Total,"10,62,567/-","25,000/-
Central Excise Division-I, Jaipur vide OIO No. 10-148/2016 dated 22.07.2016 dropped the proceedings initiated for imposition of penalty",,,
and recovery of interest under 4th proviso to Rule 96ZP(3) of the Central Excise Rules, 1944 only. Hence, I hold that the refund of penalty",,,
of Rs. 25,000/- is not admissible to the appellant.",,,
iv) In view of the above, I set aside the impugned order to the extent of refund of Rs. 10,62,597/- and uphold the same for refund of Rs.",,,
25,000/-. The appeal filed by the appellant is disposed off accordingly.â€",,,
Being aggrieved, the appellant is before this Tribunal inter alia on the following grounds:-",,,
i) That once penalty has been set aside or not imposed under Section 173Q in the remand order by the Adjudicating Authority, the finding",,,
of the Commissioner (Appeals) - the refund of amount of penalty cannot be given observing that the appellant assessee has not filed any,,,
appeal against Order-in-original dated 21.03.2012 is bad and erroneous. It is further urged that Revenue is not in appeal against the,,,
subsequent Order-in-original No. 10-148/2016 dated 22.07.2016 (pursuant to remand) whereby the penalty proceeding initiated in the,,,
show cause notice was dropped.,,,
ii) It is further urged that the Assistant Commissioner vide Order-in-original dated 07.12.2016 held that neither the appellant-assessee is,,,
entitled to refund of interest, which has been deposited as per Section 11AB nor entitled to refund of penalty amount which was imposed",,,
under Rule 173Q of Central Excise Rules, 1944. The Assistant Commissioner also observed that the assessee has claimed refund pursuant to",,,
Order-in-original dated 22.07.2016 (pursuant to remand) whereas Order-in-original No. 326/2000 dt. 16.10.2000 was not in issue in the,,,
remanded Order-in-original.,,,
The Commissioner (Appeals) observed that the appellant was engaged in manufacture of Hot Re-rolled products of Iron and Steel and was,,,
operating under ‘Annual Capacity Determination Rules, 1997’ wherein pursuant to separate Order-in-original an amount of duty of Rs. 3 lakhs",,,
was confirmed and penalty of Rs.3,000/- was imposed under Rule 173Q, but the charging of interest and penalty under 4th proviso to Rule 96ZP(3) of",,,
Central Excise Rules, 1944 was kept in abeyance in view of the general direction of the Hon’ble Supreme Court in the case of Supreme Industries",,,
and General Mills & Others. The Commissioner (Appeals) further observed that in none of the Orders-in-original there is any order for recovery of,,,
interest under Section 11AA /11AB of the Central Excise Act. Further, the interest alongwith penalty was kept in abeyance. Thus, there was no",,,
liability of interest on the appellant. Consequently, the direction of the Deputy Commissioner in his letter (Garnishee proceedings) dated 21.03.2012",,,
requiring the appellant to deposit interest, was without authority of law particularly in view of the ruling of the Hon’ble Supreme Court in the case",,,
of Hans Steel Rolling Mills vs. Commissioner of Central Excise -2011 (265) ELT 321, whereby it has been held that ‘compound levy scheme’ is",,,
a separate and complete scheme altogether and Section 11A read with Section 11AB of the Act as well as Rule 173Q of the Central Excise Rule,",,,
1944 has no application for recovery, when the assessee is operating under different scheme (compounded levy). Thus, he held that the amount of",,,
interest got deposited from the appellant is refundable and accordingly he allowed the refund of this amount.,,,
Whereas with regard to refund of penalty, he has erroneously observed that the appellant-assessee have not filed any appeal against the Orders-in-",,,
original by which penalty under Rule 173Q was imposed.,,,
Thus, the learned Commissioner (Appeals) in the impugned order have blown both hot and cold in the same breath and passed cryptic order with",,,
regard to penalty under Rule 173Q. On the one hand, he has observed that charging of penalty under Rule 173Q have been held to be ab initio void by",,,
the Hon’ble Supreme Court in the case of Hans Steel Rolling Mills (supra), whereas on the other hand, he has erred in observing that the",,,
appellant-assessee is not entitled to refund as appellant has not filed any appeal for such penalty, though the matter was sub-judice and subsequently",,,
re-adjudicated pursuant to remand, in the Order-in-original dated 22.07.2016. Accordingly, he prays for allowing the appeal with appropriate relief.",,,
Learned Authorised Representative Shri Yashveer Singh for the Revenue relies on the impugned order.,,,
Having considered the rival contentions, I find that it is admitted fact on record that the Hon’ble Supreme Court in the case of Hans Steel",,,
Rolling Mills (supra) has held that penalty under Rule 173Q is not imposable where an assessee is operating under the ‘compound levy scheme’,,,
which is a complete code in itself. The order of Hon’ble Supreme Court is binding on all sub-ordinate Courts including the Adjudicating Authority,,,
(under the taxation law) as provided in Article 141 of the Constitution of India.,,,
In this view of the matter, I hold that the observation of the Commissioner (Appeals) for denying the refund for amount of penalty under Rule",,,
173Q, is erroneous and bad. Accordingly, the impugned order-in-appeal is modified and penalty of Rs. 25,000/-deposited under the provisions of Rule",,,
173Q is held refundable. The Adjudicating Authority is directed to refund this amount within a period of sixty days from the date of receipt of copy of,,,
this order. Thus, the appeal is allowed.",,,
(Pronounced on 02.12.2021).,,,