2006 (6) TMI 427 - AT - Central Excise

Summary

Issues:
The issues involved in the judgment are the suspension of SSI exemption facility due to failure to discharge duty, demand for duty payment under Rule 173G, omission of Rule 173GG, and the validity of the show cause notice.

Suspension of SSI Exemption Facility:
The respondents failed to discharge duty twice on due dates, resulting in the suspension of the facility for payment of duty on a monthly basis. The Assistant Commissioner directed the assessee to discharge duty liability on a consignment basis until all dues were paid. The respondents paid duty by debiting the Cenvat credit account, leading to a Show Cause Notice demanding Rs. 65,092 for contravention of Rule 173G(1)(e) and (d).

Omission of Rule 173GG:
The Commissioner (Appeals) set aside the demand, arguing that Rule 173GG was omitted w.e.f. 1-4-2000, making Rule 173G applicable during the relevant period. Rule 173G(1)(e) mandated payment of excise duty for each consignment by debiting the account current. The Commissioner (Appeals) erred in relying on a non-existent rule.

Validity of Show Cause Notice:
The respondents contended that the show cause notice and the order-in-original incorrectly cited Rule 173GG(4) for duty payment, whereas they were required to pay from the account current under Rule 173GG(1). The incorrect citation of provisions does not invalidate the exercise of power, as established by the Supreme Court and Tribunal precedents.

The Tribunal upheld the authority's order, emphasizing that correctly identifying the nature of the violation is crucial, even if the specific legal provision is inaccurately referenced. The judgment was pronounced on 5-6-06.