2004 (4) TMI 373 - AT - Central Excise

Summary

Issues:
1. Permission for receiving duty paid goods for storage and hardening.
2. Demand of duty and penalty on ice-cream cleared and received back.
3. Interpretation of Rule 16 and Trade Notice No. 18/91.
4. Validity of demand against the appellant.
5. Appeal against the order of Commissioner (Appeals).
6. Revenue's appeal against non-confirmation of interest.

Analysis:

1. The appellant, a manufacturer of ice-cream, had permission to bring back unsold duty paid ice-cream for storage and hardening. However, the permission was denied after 31-3-2001, leading to a demand notice for duty on ice-cream cleared and received back. The appellant argued for special permission under Rule 16(3) due to difficulties faced, but no response was received. Despite maintaining records and following guidelines, the denial of permission was based on new rules lacking provisions for general permission.

2. A show cause notice was issued to the appellant for demanding duty on ice-cream cleared and received back from July 2001 to May 2002. The Original Adjudicating Authority confirmed the demand along with a penalty, which was reduced by the Commissioner (Appeals) on appeal. The appellant challenged the confirmation of duty demand before the Tribunal.

3. The appellant's advocate highlighted Rule 16(3) allowing goods to be received for re-making or reconditioning if facing difficulties under sub-rules (1) and (2) of Rule 16. Referring to Trade Notice No. 18/91 and Board's Circular No. 3/91, it was argued that the appellant complied with the provisions for bringing back ice-cream for storage and hardening without filing D3 declaration. The advocate also pointed out Rule 32 of the new Central Excise Rules validating trade notices in force as of 31st June 2001.

4. The Tribunal found no justification for confirming the demand against the appellant, as they had complied with the requirements and maintained necessary records. Consequently, the impugned order was set aside, and the appeal was allowed, leading to the disposal of the stay petition.

5. The Tribunal noted that the Revenue had also filed an appeal regarding the non-confirmation of interest. However, since the demand was set aside, the Revenue's appeal on interest was liable to be rejected. In summary, the appellant's appeal was allowed, while the Revenue's appeal was rejected, bringing the legal proceedings to a conclusion.