2004 (9) TMI 417 - AT - Central Excise

Summary

Issues:

- Imposition of penalty on appellants for violation of Condition-II of Notification No. 42/2001
- Interpretation of Condition No. II of the notification regarding submission of proof of export within six months

The judgment pertains to an appeal filed against the imposition of a penalty on the appellants for failing to submit proof of export within six months as per Condition-II of Notification No. 42/2001. The appellant argued that the condition only pertained to the period for exporting goods, not for submitting proof of export for bond discharge. The Judicial Member noted that the condition specifically required goods to be exported within six months from the date of clearance from the factory, with no mention of submitting proof of export within the same timeframe. It was concluded that the penalty was wrongly imposed based on a misinterpretation of the condition by the Commissioner (Appeals). The impugned order was set aside, and the appeal was allowed with any consequential relief available under the law.

In this case, the primary issue revolved around the correct interpretation of Condition No. II of Notification No. 42/2001, dated 26-6-2001, concerning the imposition of a penalty on the appellants for not submitting proof of export within six months from the date of clearance of goods from the factory. The appellant contended that the condition only mandated the export of goods within six months, not the submission of proof of export within the same period. The Judicial Member agreed with the appellant's interpretation, emphasizing that the condition explicitly stated the requirement for exporting goods within the specified timeframe, without any mention of submitting proof of export within the same duration. Consequently, the penalty imposed on the appellants was deemed unjustified, as they had complied with the condition by exporting the goods within the stipulated six-month period. The Commissioner (Appeals) was found to have misinterpreted the condition, leading to the erroneous imposition of the penalty, which was subsequently set aside in favor of the appellants.