2004 (2) TMI 435 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty for opting the Compounded Levy Scheme under Rule 96ZNA of the Central Excise Rules, 1944.

Analysis:
The appeal before the Appellate Tribunal CESTAT, NEW DELHI involved the question of whether a penalty is imposable on M/s. Prime Exports for choosing to avail the Compounded Levy Scheme under Rule 96ZNA of the Central Excise Rules, 1944. The appellants, engaged in processing textile fabrics, had opted for this scheme. The Commissioner had rejected their application, stating they did not meet the conditions of the Notification for eligibility for the Special Procedure of Compounded Levy Scheme. The appellants did not challenge this denial but contested the penalty of Rs. 50,000 imposed on them for filing a wrong declaration. They argued that no penalty should be imposed as they had opted for the Special Procedure of Compounded Levy and had paid duty exceeding what was payable, even claiming a refund of the excess duty paid. The Commissioner did not address the refund claim in the impugned order.

The learned Advocate for the appellants argued that no penalty should be imposed when an assessee opts for a Special Procedure and submits the required declaration to the Department. The Department did not dispute that the appellants had paid more duty by choosing the Compounded Levy Scheme. The Tribunal upheld the Commissioner's order regarding the denial of the Special Procedure of Compounded Levy but set aside the penalty imposed on the appellants. It was noted that if any duty had been overpaid, the appellants should follow the procedure under Section 11B of the Central Excise Act to claim a refund. The Tribunal emphasized that the appellants must adhere to the prescribed procedures for refund claims. Consequently, the appeal was disposed of with the penalty being revoked, and the appellants were directed to follow the proper refund process if necessary.