Inflicting penalty without any authority

I do not subscribe to the opinion expressed by the author as it lacks consistency. The Rule 27 of CER2002 which reads, “A breach of these rules shall, where no other penalty is provided herein or in the Act, be punishable with a penalty which may extend to five thousand rupees and with confiscation of the goods in respect of which the offence is committed”, means it covers all instances wherein breaches / violations are noticed and separate penalty not prescribed. The department is regularly imposing penalty invoking provisions of Rule 27 from the beginning, whenever violations of Rules and Act are noticed, including the delay in filing return, and in all such cases where there is no specific penal measure stipulated. In this regard department has issued instruction in F.No.267/117/2010-CX8 dated 14-01-2011, which is a clear indication that it is not a recent happening. I have seen orders as early as 2005 which have invoked this provision to cover the instances quoted by the author. The Rule 12 prescribes that “every assessee shall submit … a monthly return in the form specified by notification … of production and removal of goods and other relevant particulars, within ten days after the close of the month to which the return relates….etc, ” has to be strictly adhered to as the term ‘shall’ indicates. Not conforming to the above provisions (omission to act) is an offence and there is no need to further emphasis to term it as an offence. It is a fact that delay in filing returns is frequent and rampant when compared to earlier years, and therefore the law has been amended by issue of notification no 8/2015 Central Excise (NT) dated 01.03.2015 with a purpose to cover such instances specifically. This new measure inserted in respective rules is to specifically cover such instances and to make penalty in such instances imperative, without allowing the executive to use his discretion or liberty by resorting to Rule 27. The law has been provided with specific stings so that there is no scope for the executive either to ignore or take arbitrary decisions in such instances. This should not be read to interpret that there was no provision to impose penalty in the instances of stated breaches, prior to 01.03.2015.

Regarding the applicability of the amended law, for notices issued for such violations prior to 01.03.2015 and covering period only upto 01.03.2015, the Rule 27 could alone be invoked. But if the notice is issued after 01.03.2015, which includes continued breaches after 01.03.2015, the amended existing law could be invoked.
M G kodandaram
Supdt NACEN
Bengaluru

madihally kodandaram 30/05/2015