M/S Bansal Alloys & Metals Private ... vs Union Of India And Another on 8 November, 2010
Penalty imposed on the appellant is in terms of Rule 96ZO of the erstwhile Central Excise Rules, 1944. Provision existed at that time in that Rule was that penalty shall be levied equal to duty. Such an issue was addressed by Honble High Court of Punjab & Haryana in the case of Bansal Alloys & Metals Pvt. Ltd. 2010 (260) ELT 343 (P&H) holding that minimum sentence is to be decided on touch stone of reasonableness. Appeal of proportionality guides the quantum of punishment. If the statute provide for disproportionate or excessive restriction on fundamental right the Court can go into the question whether there is proper balance in fundamental right and the restriction imposed by law. Since the law provides minimum penalty to the extent of duty that ousts the jurisdiction of levying authority from his application of mind which is not subscribed by elementary principle of jurisprudence. Therefore, penalty of Rs. 1.00 crore imposed in this case which is equal to the duty is not permissible following the principle of laws laid down by the judgement of Honble High Court of Punjab & Haryana in the case of Bansal Alloys & Metal (P) Ltd. vs. UOI 2010 (260) ELT 343 (P&H). The impugned order is accordingly set aside and appeal is allowed.