ORDER
Jyoti Balasundaram, Member (J)
1. This is an application for waiver of predeposit of penalty of Rs.29,50,000/- imposed by the Dy.Commissioner and upheld by the Commissioner (Appeals). Reason for imposition of penalty is delayed payment of duty by the applicants who are processing fabrics falling under Chapter 54 and 55 of the Central Excise Tariff Act, 1985 with the aid of Hot Air Stenter. Duty is to be paid as per Rule 96 ZQ(3) of the Central Excise Rules, 1944 by 15th of every month, while duty has been paid beyond that date and the delay ranges from one day to 15 days during the period of dispute namely March to July 1999. Under the Rules penalty is also imposable, if an independent processor fails to pay the amount of duty or any part thereof by the date specified in Sub-rule (3) to Rule 96ZQ, namely 15th of each month and the Rules provide: (i) pay the penalty equal to an amount of duty outstanding from him or Rupees five thousand, whichever is greater.
2. The adjudicating authority’s order was appealed against the order of the Commissioner (Appeals) who directed predeposit of the entire penalty amount by the Stay Order dated 25.5.2000. The applicants were once again granted a personal hearing on 28.6.2000 and were specifically asked to produce the proof of predeposit as per the stay order. Since the same were not produced before the lower appellate authority, he dismissed the appeal filed by the appellants o n the ground of non-compliance with the statutory requirement of Central Excise Act.
3. Learned Advocate, Shri D.D. Gwalani submits that duty was paid by them belatedly before the end of the month and, therefore, having regard to the Rule as it stood at the relevant time, penalty was not imposable and penalty could be imposed only if the amount was outstanding at the end of the month which was not the case here. In these circumstances, he prays for waiver of predeposit and stay of recovery of penalty. He also states that Rs.1,35,485/- out of the interest amount has already been paid.
4. Smt. Reena Arya, learned DR submits that the Rule as it stood during the relevant time calls for imposition of penalty. The duty amount is to be paid by 1the 15th of the month; therefore, the imposition of penalty is prima-facie justified for delayed payment. She submits that the applicants have not given any satisfactory explanation for non-compliance with the stay order of the Commissioner (Appeals) and in the light of the Supreme Court judgment in the case of Navin Chandra Chhotelal vs. Central Board of Excise and Customs and Others reported in 1981 ELT 679 (SC), the appeal can be dismissed on the ground of non-compliance.
5. We have carefully considered the rival submissions and gone through the records and the Rules. It is to be noted that the applicants have habitually delayed payment over a period of time from March to July 1999 and that prima-facie, Rules provide for imposition of penalty. Prima-facie, there is no legal infirmity in the impugned order dismissing the appeal for non-compliance. However, looking to the totality of facts and circumstances and the high amount of penalty imposed, we are of the view that ends of justice would be met in this case by directing predeposit of a sum of Rs.5 lakhs towards penalty to be paid within a period of weeks from the date of receipt of this order. On such predeposit, the predeposit of duty and penalty shall stand dispensed with and its recovery stayed pending the appeal. failure to comply with this direction shall result in vacation of the stay and dismissal of appeal without further notice.
6. Compliance to be reported on 3.4.2001.
7. (Pronounced in Court)