2006 (7) TMI 432 - AT - Central Excise

Summary

Issues:
1. Demand of duty on the product "Glucovita - Glueon D" for a specific period.
2. Penalty imposed on the appellant by the Commissioner.
3. Allegations against the appellant regarding the removal and transportation of goods.
4. Challenge to the duty liability fixed on the appellant.
5. Interpretation of Circulars regarding duty liability on repacking of goods.
6. Validity of duty liability cast on the appellant in the absence of any corrigendum to the show-cause notice.

Analysis:
1. The appeal contested the demand of duty exceeding Rs. 25 lakhs on the product "Glucovita - Glueon D" for a specified period, along with a penalty of Rs. 50,000 imposed by the Commissioner. The show-cause notice issued earlier raised concerns about duty evasion by M/s. CPCIL, attributing the removal and transportation of goods to the appellant and others. The Collector of Central Excise confirmed the duty demand against M/s. CPCIL initially, with penalties imposed on both M/s. CPCIL and the appellant. Subsequent adjudications shifted the duty liability onto the appellant, culminating in the impugned order.

2. The appellant challenged the duty liability imposed on them, arguing that it exceeded the scope of the original show-cause notice, which targeted M/s. CPCIL. The appellant's Counsel highlighted inconsistencies in the lower authority's findings regarding duty liability and valuation of goods, referencing a Supreme Court ruling. Additionally, the appellant invoked Circulars from 1970 and 1990 to support their position that the duty liability was wrongly placed on them, seeking the benefit of the earlier Circular.

3. The Tribunal found merit in the appellant's contentions, deeming the challenge to the Commissioner's order as compelling. The allegations in the show-cause notice specifically implicated M/s. CPCIL, with no subsequent corrigendum issued to redirect the liability towards the appellant. The Tribunal concluded that the duty liability cast on the appellant was legally unsustainable, leading to the setting aside of the impugned order and allowing the appeal with consequential reliefs. The judgment focused on the fundamental flaw in attributing duty liability to the appellant without proper legal basis.

This detailed analysis of the legal judgment from the Appellate Tribunal CESTAT, Chennai highlights the key issues, arguments presented, and the ultimate decision rendered in favor of the appellant based on the legal principles and interpretations discussed during the proceedings.