2007 (4) TMI 556 - AT - Central Excise

Summary

Issues involved: Challenge to order confirming demand under Rule 96-ZB, imposition of penalty under various rules, entitlement to benefit under Rule 96-ZGG, validity of penalties imposed.

Summary:
1. The appellant challenged the order confirming a demand of Rs. 82,500 under Rule 96-ZB and imposition of penalties under different rules. The appellant was engaged in manufacturing Aluminum Circles and had opted for a special procedure under Rule 96-ZA. The duty was paid partially, and show cause notices were issued for non-payment for various periods.

2. The appellant contended that due to electricity supply disconnection, they could not avail of Rule 96-ZA benefits. The defense argued that no production could occur without power supply and penalty amounts exceeded limits set by the rules.

3. The appellant's defense of power supply disconnection was initially rejected by authorities due to lack of prior intimation. However, evidence including a sent intimation, affidavit, and disconnection order supported the claim. The appellant's production halt due to power cut was deemed credible.

4. Under Rule 96-ZGG, the appellant was entitled to benefits as the factory ceased operations. Duty was calculated based on the last month's machinery count. Duty was payable for January and February 1998, with interest for delayed payment.

5. Penalties totaling Rs. 82,000 were imposed, but it was argued that certain penalties were not applicable as the appellant was allowed to discharge duty liability under specific provisions. The penalties imposed exceeded the permissible limit under the rules.

6. The Tribunal modified the order, directing the appellant to pay a reduced duty amount of Rs. 15,000 under Rule 96-ZB, along with interest. The penalty was reduced to Rs. 4,000. The appeal was partly allowed based on the findings.