2003 (7) TMI 522 - AT - Central Excise

Summary

Issues:
- Duty confirmation on 'Kimam' manufactured by the appellants
- Imposition of penalties and confiscation of seized goods
- Eligibility of the appellants under Notification No. 121/94-C.E.
- Compliance with Chapter X of the Central Excise Rules
- Interpretation of substantial compliance in the interest of justice
- Documentary evidence and procedural fulfillment by the appellants

Analysis:
The appellants filed appeals against an adjudication order confirming duty on 'Kimam' they manufactured, imposing penalties, and confiscating seized goods used in Branded Chewing Tobacco production. The Tribunal upheld the duty demand but remanded the matter for assessing eligibility under Notification No. 121/94-C.E. The impugned order stated the appellants didn't follow Chapter X procedures, denying them benefits under the notification.

The appellants argued substantial compliance based on Supreme Court and Tribunal precedents, emphasizing the transfer of Kimam to another unit for Branded Chewing Tobacco. They provided transfer Challans, Form IV Register, and relied on relevant case law. The Revenue contended non-compliance with the notification's procedural requirements.

The Tribunal considered the substantial compliance principle from previous judgments, emphasizing the intended use of material for duty exemption. It noted the Revenue didn't dispute Kimam's use in Branded Chewing Tobacco production, entitling the appellants to Notification No. 121/94-C.E. The impugned order was set aside, and the appeals were allowed, recognizing the appellants' entitlement to the notification benefits based on established use of Kimam.