Custom, Excise & Service Tax Tribunal
Kunnath Textiles vs The Commissioner Of Customs & Central ... on 30 November, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench - Division Bench
Court - I
Date of Hearing: 30.11.2011
Date of decision: 30.11.2011
Appeal No. E/956/2006
(Arising out of Order-in-Appeal No. 375/2006-CE dated 23.06.2006 passed by the Commissioner of Customs & Central Excise, Cochin)
For approval and signature:
Honble Mr. P.G. Chacko, Member (Judicial)
Honble Mr. M. Veeraiyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3. Whether their Lordship wish to see the fair copy of the Order?
Seen
4. Whether Order is to be circulated to the Departmental authorities?
Yes
Kunnath Textiles ..Appellant(s)
Vs.
The Commissioner of Customs & Central Excise
Cochin Respondent(s)
Appearance Mr. K.T. Antony, Authorized Representative, for the appellant Mr. Ganesh Haavanur, SDR, for the revenue Coram:
Honble Mr. P.G. Chacko, Member (Judicial) Honble Mr. M. Veeraiyan, Member (Technical) FINAL ORDER No._______________________2011 Per: P.G. Chacko In this appeal filed by the assessee the limited challenge is against a penalty of Rs. 15,000/- imposed on them under Rule 25 of the Central Excise Rules, 2002. In adjudication of a show-cause notice, the original authority had confirmed demand of Rs. 4,39,440/- for the period from 01.10.2003 to 08.07.2004 against the assessee by denying them SSI exemption under Notification No.8/2003 CE dated 01.03.2003. However, duty paid on intermediate product has allowed as CENVAT credit. The adjudicating authority also held that interest under Rule 8 of the Central Excise Rules, 2002 read with Section 11AB of the Central Excise Act was also payable by the assessee. A penalty of Rs. 15,000/- under Rule 25 was also imposed on them. The order of adjudication was upheld by the Commissioner (Appeals) in an appeal filed by the assessee. Hence, the present appeal before us.
2. The managing partner of the appellant-firm appears and submits that the amount of duty was voluntarily paid on 16.02.2010 and that he had no intent to evade duty. He was not aware of the duty liability during the material period and hence did not collect duty from the buyers. It is categorically stated that the appellant does not dispute duty liability. In the circumstances, the appellant prays for setting aside the penalty.
3. We have heard the learned SDR also who has argued in support of the penalty on the strength of the findings recorded by the original and appellate authorities.
4. After giving careful consideration to the submissions we are of the view that, in the peculiar facts and circumstances of this case, the plea for vacating the penalty is tenable. It appears from the records that the benefit of Notification No. 67/95-CE was claimed in respect of the intermediate product the value of which was sought to be included in the gross value of clearances for purposes of the above notification. The substantive dispute between the department and the assessee revolved around the question whether the value of the intermediate product was liable to be included in the gross value of clearances for the fiscal year in question. Essentially, therefore, a decision defended on interpretation of the relevant conditions of the notification. It has been consistently held by this Tribunal and various High Courts and Supreme Court that an assessee shall not be penalized in a case where the demand on them defended on interpretation of the conditions of the exemption notification claimed by the assessee. We have found this case to be one instance. Hence we set aside the penalty and allow this appeal.
(Pronounced and dictated in open Court)
(M. VEERAIYAN) (P.G. CHACKO)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
iss