2002 (10) TMI 537 - AT - Central Excise

Summary

Issues:
1. Duty payment on goods sent to job worker for further manufacture under Rule 57F(4) and Notification No. 214/86.
2. Imposition of penalty under Section 11AC on supplier-manufacturer.
3. Appeal against duty confirmation and penalty imposition.

Analysis:

Issue 1:
The assessees sent rubber intermediate products to a job worker for tread rubber manufacture under Rule 57F(4) and Notification No. 214/86. The burden of duty payment lies on the supplier-manufacturer, who issued invoices and paid duty. The Jt. Commissioner confirmed duty and imposed penalties for non-compliance. The Commissioner upheld the findings against the supplier-manufacturer, leading to the present appeal by M/s. Emkay Elastomers.

Issue 2:
During the hearing, the appellants argued that duty was paid voluntarily and the remaining amount was due to a calculation error. They contended that Section 11AC applies only in cases of fraud or suppression of facts. However, the show cause notice mentioned clandestine clearance. The Tribunal noted that penalties can be waived for voluntary payments but emphasized that each case must be examined for bona fide mistakes. The burden of duty was clearly on the appellants per the notification, and their understanding was questioned. The Tribunal upheld the penalty under Sec. 11AC but reduced it to Rs. 20,000 considering the small amount and limited instances.

Issue 3:
The Tribunal found that the appellants were aware of their duty obligations and had given an undertaking for duty discharge. Despite arguments of misunderstanding, the Tribunal held that the penalty was justified under Sec. 11AC. The penalty amount was reduced due to the small remaining duty sum and limited instances of non-compliance.

In conclusion, the appeal was disposed of with the Tribunal upholding the duty confirmation and penalty imposition, albeit reducing the penalty amount.