2005 (4) TMI 384 - AT - Central Excise

Summary

Issues: Penalty imposed on 100% EOU for alleged misuse of imported machinery under specific notifications.

Analysis:
1. The issue in this case pertains to a penalty of Rs. 25,000 imposed on the appellant, a 100% EOU, for allegedly misusing imported machinery under specific customs notifications. The appellant was accused of using the machinery in a manner not compliant with the provisions of Notification No. 13/81(Cus) dated 9-2-1981 and Notification No. 123/81 (Cus) dated 2-6-1981. The machinery was utilized for pre-cooling grapes, which were not intended for export, contrary to the purpose of manufacture of goods for export as required by the notifications.

2. The appellant relied on a previous judgment in the case of India Charge Chrome Ltd. v. C.C, Bhubaneshwar, where it was held that the notifications did not explicitly require the imported goods to be 'solely' or 'exclusively' used for export-oriented manufacturing. The Tribunal's decision in that case was upheld by the Supreme Court. Following this precedent, the Tribunal in the present case concluded that the penalty imposed on the appellant was not justified. The Tribunal set aside the penalty of Rs. 25,000 considering the interpretation of the relevant notifications and the absence of confiscation of goods or confirmation of duty demand by the adjudicating Commissioner.

3. The judgment was delivered by two members of the Appellate Tribunal, with Member (J) Archana Wadhwa stating the main reasoning behind setting aside the penalty. Member (T) C. Satapathy provided additional assent, concurring with the decision to annul the penalty due to the lack of justification in imposing it without the confiscation of goods or confirmation of any duty demand by the adjudicating Commissioner.

In conclusion, the Appellate Tribunal, Mumbai, in this case, ruled in favor of the appellant, setting aside the penalty imposed for the alleged misuse of imported machinery under specific customs notifications. The decision was based on the interpretation of relevant legal precedents and the absence of additional punitive actions such as confiscation of goods or confirmation of duty demand.