2006 (10) TMI 287 - AT - Central Excise

Summary

Issues: Allegation of non-receipt of goods from job worker, imposition of interest under Section 11AB, applicability of penalty and interest when duty amount paid prior to Show-Cause-Notice.

Allegation of non-receipt of goods from job worker:
In the present appeal, the main issue revolved around the allegation by the Department that the assessee did not receive the goods back after re-processing from their Job Worker. The Department claimed that the assessee failed to produce satisfactory evidence supporting the receipt of goods within the stipulated period. However, the assessee contended that they did receive the goods within 180 days, albeit without the green copies of the bill. The authorities below refrained from imposing a penalty but ordered the imposition of interest under Section 11AB from the date of sending the goods to the job worker until the payment of duty. The appellants produced relevant copies for perusal, which were allegedly not considered by the lower authorities.

Imposition of interest under Section 11AB:
The assessee had deposited the confirmed duty amount promptly within 2 days, despite the Show-Cause-Notice being issued after a delay of 9 months. The duty amount was confirmed upon adjudication of the Show-Cause-Notice, and while the penalty amount was dropped, interest was sought to be levied. The appellant's counsel cited various cases to argue that when duty amount is paid before the Show-Cause-Notice is issued, interest and penalty cannot be levied.

Applicability of penalty and interest when duty amount paid prior to Show-Cause-Notice:
The Department argued that a recent judgment of Punjab and Haryana High Court cast doubt on the applicability of certain precedents cited by the appellants. The High Court set guidelines for reviewing previous decisions, stating that if goods were not received, it could amount to clandestine removal without duty payment. As a result, the applicability of the cited precedents was questioned due to the lack of findings regarding the receipt of goods. Consequently, the matter was remanded back to the Original Adjudicating Authority for a fresh review of all documentary evidence and any new evidence that may be presented, emphasizing the need for a comprehensive consideration before disposing of the appeal. The appeal was allowed for remand in light of the circumstances.