2006 (12) TMI 367 - AT - Central Excise

Summary

Issues involved: Appeal against orders passed by Commissioner of Central Excise (Appeals), Madurai regarding duty liability on HDPE/PP sacks removal u/s 2002-03 and 2002-04.

Summary:
The appeals were filed against two orders passed by the Commissioner of Central Excise (Appeals), Madurai, regarding duty liability on HDPE/PP sacks removal by M/s. Reliance Plastics P. Ltd (RPL) and M/s. Plasweave Pvt. Ltd. (PPL) during 2002-03 and 2002-04. The appellants had debited credit in their Cenvat accounts which had not accrued at the time of clearances, contrary to statutory provisions. The Commissioner (Appeals) affirmed duty demands and penalties imposed on both assessees, along with interest. The appeals sought to set aside these orders.

The appellants had removed goods without payment of duty, which was later adjusted against Cenvat credit accrued. The duty demands were found to be in accordance with the law and sustainable. The assessees were directed to pay the duty amounts in PLA, becoming eligible for corresponding Cenvat credit upon payment. Penalties imposed on the assessees were reduced to Rs. 35,000/- on RPL and Rs. 25,000/- on PPL, considering the specific circumstances of the case. The penalty on Shri Murugan, an employee, was reduced to Rs. 2000. The impugned orders were upheld except for the modifications mentioned above.