2007 (1) TMI 420 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57 AB of Central Excise Rules and Rule 3 (4) of Cenvat Credit Rules 2001/2002 regarding payment of duty on removed inputs.
2. Restoration of penalty under Section 11AC of Central Excise Act, 1944.

Analysis:

Issue 1: Interpretation of Rules Regarding Payment of Duty on Removed Inputs
The appeal was filed by the revenue against a part of the impugned order where the Commissioner (Appeals) decided that the inputs removed by the respondents during specific periods were not liable for duty payment equal to the credit availed by them. The Commissioner relied on the decisions of the Tribunal in the cases of CCE v. Asia Brown Boveri Ltd. and Southern Iron & Steel Co. v. CCE. The Tribunal's decision in Asia Brown Boveri Ltd. was upheld by the Supreme Court. The revenue contended that the order was not in accordance with Rule 57 AB of Central Excise Rules and Rule 3 (4) of Cenvat Credit Rules 2001/2002. The revenue argued that duty had to be paid on the removed inputs as if they were manufactured by the assessee, as per the rules in force at the time.

Issue 2: Restoration of Penalty under Section 11AC of Central Excise Act, 1944
The revenue also sought to restore the penalty of Rs. 1,18,862/- under Section 11AC of the Central Excise Act, 1944, which had been reduced by the Commissioner (Appeals) to Rs. 5,000/-. The Tribunal noted that the impugned order was passed in line with its previous judgments, which were upheld by the Supreme Court. The Tribunal emphasized that decisions following its established ratio are binding on authorities unless appealed against and stayed. The Tribunal also observed that the appeal filed by the revenue was limited to challenging the reduction of penalty, as per the authorization signed by the Committee of Commissioners.

In conclusion, the Tribunal dismissed the revenue's appeal, stating that the decision to reduce the penalty was not unreasonable, considering the reduction in the total demand in the impugned order. The Tribunal found no merit in the revenue's appeal and upheld the decision to dismiss it.

This detailed analysis of the judgment highlights the key issues of interpretation of rules regarding duty payment on removed inputs and the restoration of penalty under the Central Excise Act, providing a comprehensive understanding of the Tribunal's decision in this case.