2007 (4) TMI 449 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case are the disposal of capital goods without payment of appropriate duty, contraventions of Central Excise Rules, and the validity of the show cause notice issued.

Disposal of Capital Goods:
The appellants were issued a show cause notice for disposing of certain capital goods without payment of duty and without intimation to the Central Excise Authorities, in violation of Central Excise Rules. The Commissioner confirmed a duty demand of Rs. 99,39,138/- along with interest and imposed a penalty under Section 11AC of the Central Excise Act, 1944.

Validity of Show Cause Notice:
The appellants argued that the show cause notice was issued under rules that were no longer in existence, as they had been substituted by new Cenvat Rules. They contended that the notice should be struck down on this ground alone. They relied on a Tribunal decision and subsequent orders that supported their position. The appellants emphasized that the substituted provision should not have retrospective effect in this case, as the notice was issued under rules that were not in force at the time.

Judgment:
The Tribunal found that the appellants' case aligned with the precedent set by the Tribunal in a previous case. The Tribunal distinguished the Supreme Court decision cited by the respondent, noting that it related to an exemption notification and not to the situation at hand. Since the show cause notice was not issued under the new provision, the Tribunal concluded that the question of retrospective effect did not apply. Therefore, the Tribunal allowed the appeal, setting aside the Commissioner's order without delving into other issues.