2005 (3) TMI 549 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposed on a Training Institution for tools captively consumed during a period without exemption.

Analysis:
The appellant, a Training Institution engaged in manufacturing tools, faced duty demand and penalty for tools captively consumed during a period when the exemption was rescinded. The excise authority raised duty demand under a show cause notice for tools consumed during the period without exemption. The appellant contested the charges, arguing against the intent to evade duty and citing the re-introduction of exemption as evidence that the Government did not intend to levy duty on captively consumed tools. The appellant also highlighted being a Training Institution to justify a lower penalty.

The Tribunal examined the contentions and evidence presented by both sides. The appellant's argument that there was no intent to evade duty and the recovery was made beyond the stipulated period under Section 11A of the Central Excise Act was considered. The Departmental Representative (DR) countered, emphasizing that the absence of exemption for over a year indicated a deliberate revocation and that the extended period for recovery of duty applied due to the non-filing of RT 12 Return by the appellants, which suppressed the non-duty paid removal of tools from excise authorities.

Ultimately, the Tribunal sided with the Revenue on both the merits of the case and the question of limitation. It upheld the correctness of the duty demand and the application of the extended period for recovery. However, considering the appellant's status as a Training Institution, the penalty imposed was reduced significantly to Rs. 5,000 from the original amount. Consequently, the appeal was partly allowed, with the duty demand being upheld but the penalty reduced due to the appellant's nature as a Training Institution.