2002 (7) TMI 369 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty, penalty, and interest by Additional Commissioner of Central Excise.
2. Appeal against Commissioner (Appeals) order by M/s. W.G. Maurya Shertaon Hotel & Towers and the Revenue.
3. Classification of products and liability for duty.
4. Application of extended period for demand of duty.
5. Appeal by Revenue against setting aside interest under Section 11AB.

Issue 1:
The Additional Commissioner of Central Excise confirmed a duty of Rs. 8,40,949 on M/s. W.G. Maurya Shertaon Hotel & Towers, imposed a penalty of Rs. 8,42,000, and directed interest under Section 11AB. The Commissioner (Appeals) reduced the penalty but upheld the duty and rejected the interest.

Issue 2:
Both M/s. W.G. Maurya Shertaon Hotel & Towers and the Revenue appealed against the Commissioner (Appeals) order. The hotel sought waiver of the balance of duty and penalty, having already paid a significant sum. The Tribunal granted the waiver but considered both appeals together for disposal.

Issue 3:
The case involved the manufacture and sale of cakes, pastries, chocolates, and bakery products without excise registration or payment of duty. The dispute centered on whether the process undertaken by the hotel constituted "manufacture" under Chapter 18 of the Central Excise Tariff.

Issue 4:
Regarding the extended period for duty demand, the hotel argued a lack of intent to evade duty, claiming a bona fide belief that their products were not dutiable. However, the Tribunal found no evidence to support this argument and upheld the extended period for demand, though reducing the penalty.

Issue 5:
The Revenue appealed against the setting aside of interest under Section 11AB. The Tribunal cited precedents and held that interest could only be charged from the effective date of Section 11AB, not for the period prior to its enactment.

In conclusion, the Tribunal rejected the appeal by M/s. W.G. Maurya Shertaon Hotel & Towers regarding duty confirmation but reduced the penalty. The Revenue's appeal was partially allowed, limiting the interest chargeable under Section 11AB to a specific period. Both appeals were disposed of accordingly.