2002 (10) TMI 503 - AT - Central Excise

Summary

Issues:
1. Eligibility for SSI exemption under Notification No. 1/93 from 1-4-1994.
2. Demand of duty on alleged shortages of steel tubes.
3. Imposition of penalty.

Eligibility for SSI exemption under Notification No. 1/93 from 1-4-1994:
The appellants, manufacturers of Steel Tubes, were registered with the Directorate General of Technical Development (D.G.T.D) and availed exemption under Notification No. 202/98-C.E. However, due to the rescinding of this notification, they obtained a Central Excise registration Certificate and started clearing goods on payment of duty. The D.G.T.D was abolished on 31-3-94, rendering the registration void from 1-4-1994. The appellants claimed eligibility for SSI exemption under Notification No. 1/93 from 1-4-1994. The Tribunal analyzed the registration with D.G.T.D and established that registration post-1-4-94 was not applicable, making the appellants eligible for the exemption from 1-4-1994.

Demand of duty on alleged shortages of steel tubes:
The lower authorities confirmed a duty demand of Rs. 45,503 on alleged shortages of steel tubes. The appellants argued that the reported shortage and excess were within tolerance limits as per ISI specifications. However, since no technical data or specifications were provided, this argument was dismissed. The Tribunal, considering the appellants' eligibility for the exemption, directed the duty to be calculated as per the exemption notification rates and recovered.

Imposition of penalty:
The penalty of Rs. 40,000 imposed on the appellants was contested on the grounds of a genuine belief in eligibility from 1-4-94 due to the abolition of D.G.T.D. The Tribunal found merit in this argument, setting aside the penalty. Consequently, the penalty was revoked based on the appellants' eligibility for the SSI exemption from 1-4-1994. The appeal was allowed concerning eligibility and penalty, with the duty calculation remanded to the original authority for further assessment.