2005 (4) TMI 453 - AT - Central Excise

Summary

Issues: Duty demand confirmation, penalty imposition based on deemed credit availed under different notifications.

The judgment by the Appellate Tribunal CESTAT, New Delhi addressed a case where a duty demand of Rs. 3,42,932/- was confirmed against the appellants, along with a penalty of Rs. 50,000/-, for availing deemed credit earned under Notification 17/2000-C.E. (N.T.) dated 1-3-2000 under a subsequent Notification 7/2001-C.E. (N.T.) dated 1-3-2001. The lower appellate authority rejected the appeal citing that the second Notification did not explicitly mention the utilization of credit earned under the earlier Notification. The appellants referenced the Tribunal's decision in Dhar Cement Ltd. v. CCE, Indore, 1996 (86) E.L.T. 515, and the High Court of Delhi's decision in Amrit Banaspati Co. Ltd. v. UOI - 2004 (163) E.L.T. 310, confirmed by the Apex Court, to support their case.

Upon review, the Tribunal found the appellants' case stronger than those dealt with in the cited case law. The deemed credit under the new Notification was continued for the impugned commodity, and the new Notification did not contain a provision stating that unutilized deemed credit would lapse. Therefore, the Tribunal concluded that the lower authorities' decision to confirm the demand and impose a penalty was unjustified. The Tribunal noted that penalizing the appellants for utilizing the credit under a fresh Notification, which continued the deemed credit scheme, was not warranted merely due to the issuance of a new Notification rescinding the earlier one. Consequently, the Tribunal set aside the impugned orders and allowed the appeal, providing consequential benefits to the appellants.

In summary, the Tribunal's judgment revolved around the interpretation of utilizing deemed credit earned under different notifications and the absence of a provision for lapsing unutilized credit. The decision highlighted the continuity of the deemed credit scheme under the fresh Notification and deemed the penalty imposition unjustified. The Tribunal's ruling favored the appellants, emphasizing the absence of a provision for lapsing unutilized credit and the continuity of the scheme under the subsequent Notification.