2004 (12) TMI 617 - AT - Central Excise

Summary

Issues Involved:
Classification list error leading to duty confirmation and penalty imposition.

Analysis:
The appellant filed a classification list effective from 1-4-94 but did not declare the intent to avail the benefit of exemption in respect of the first clearance of 30 Lakhs. Instead, they claimed a concessional rate of duty of 15%. However, the clearance in April 1994 was done at a nil rate of duty. Upon realizing the mistake, the appellant filed another classification list on 3-5-94 claiming full exemption under notification no. 1/93-CX. A show cause notice was issued proposing duty confirmation for clearances at nil rate of duty due to the initial classification list error. The appellant's plea of a typographical error was rejected, resulting in a duty demand of Rs. 83,215.50 and a penalty of Rs. 5,000 being imposed. The appeal against the original order did not succeed, leading to the present appeal.

Upon examination of the classification list, it was noted that the appellant had declared the intent to avail the exemption for the first clearance of Rs. 30 lakhs but mistakenly cleared the goods at nil rate of duty despite mentioning a concessional rate of 15%. The appellant's actions indicated the intention to avail the exemption from the beginning, as they never opted to pay duty at a concessional rate. The non-mention of the nil rate in the list was deemed an inadvertent error, rectified by filing a revised classification list. The confirmation of duty demand and penalty imposition was considered unjustified as the appellant's intention to avail the exemption was evident.

In conclusion, the Tribunal found that denying the appellant the benefit of the small-scale exemption notification was unwarranted, and the penalty was deemed unsustainable. Therefore, the appeal was allowed, providing consequential relief to the appellant.