Custom, Excise & Service Tax Tribunal
M/S. Jansons Textile Processors vs Cce, Salem on 4 January, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/565/2005
(Arising out of Order-in-Appeal No. 70/2005-CE [SLM] dated 10.5.2005 passed by the Commissioner of Central Excise (Appeals), Salem)
For approval and signature:
Honble Mr. P. G. Chacko, Member (Judicial)
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether the Member wishes to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. Jansons Textile Processors Appellants
Vs.
CCE, Salem Respondent
Appearance Shri M. Saravanan, Consultant for the Appellants Shri N.J. Kumaresh, SDR, for the Respondent CORAM Honble Mr. P. G. Chacko, Member (J) Date of Hearing: 04.01.2008 Date of Decision: 04.01.2008 Final Order No. ____________ The appellants were engaged in the processing of cotton and man made fabrics during the material period. They were paying duty on the processed fabrics under the compounded levy scheme under Section 3A of the Central Excise Act. Upon finding that they had not discharged duty liability for February and March 1999 on the basis of their Annual Capacity of Production [ACP for short] determined by the Commissioner, the department issued a show-cause notice demanding the duty together with interest @ 36% p.a. under Rule 96ZQ of the Central Excise Rules, 1944 and proposing penalty on them under the said rule. In their reply to the show-cause notice, they submitted that they had remitted an amount of Rs.2,46,170/- towards duty for the above period after availing abatement of duty for the period of non-operation of their stenter. The abatement ordered by the Commissioner was to the extent of Rs.12,53,830/-. In adjudication of the show-cause notice, the original authority found that the party had already paid duty of Rs.12,53,830/- and had appropriated the same towards the above demand of duty. However, interest @ 36% p.a. was determined under sub-rule (5) of Rule 96ZQ and a penalty of Rs.12,53,830/- was imposed under the same provision. In appeal, the Commissioner (Appeals) sustained the order of the lower authority after reducing the penalty to Rs.3,53,830/-. The present appeal is against the Commissioners order.
2. After hearing both sides and considering their submissions, I find that the issues involved in this case have to be held in favour of the assessee in view of Jupiter Textile Processing Vs. CCE, Chennai [2006 (202) ELT 652 (Tri. Chennai)], wherein it was held that the assessee had no liability to pay penalty after Rule 3 of the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 was struck down by the High Court in Beauty Dyers Vs. Union of India [2004 (166) ELT 27 (Mad.)]. On facts also, I have not found any delay in payment of duty by the appellants and therefore there is no question of demand of interest on duty, nor is there any reason to impose penalty on the party.
In the result the impugned order is set aside and this appeal is allowed.
(Dictated and pronounced in open court)
(P.G. CHACKO) Member (J)
Rex
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