2008 (4) TMI 579 - AT - Central Excise

Summary

Issues involved: Appeal against duty payment, penalty under Section 11AC, penalty under Rule 25, denial of SSI benefit under Notification No. 8/2005-C.E., interpretation of para 3A of the Notification, exclusion of certain goods from aggregate value of clearances, plea of limitation, applicability of case laws on limitation.

Summary:
The appeal before the Appellate Tribunal CESTAT, Chennai involved a dispute regarding duty payment of over Rs. 79 lakhs, penalty under Section 11AC, and another penalty of Rs. 15 lakhs under Rule 25. The issue stemmed from the denial of SSI benefit under Notification No. 8/2005-C.E. The Revenue contended that the appellants exceeded the threshold for SSI benefit eligibility, while the assessee argued for the exclusion of certain goods from the calculation. The assessee relied on a previous judgment and pleaded time-bar against a major part of the demand, citing the availability of CENVAT credit and a bona fide belief regarding exclusion criteria.

Upon examination, the Tribunal noted the disagreement on the inclusion of export sales of packing materials in the duty demand calculation. The Tribunal found merit in the assessee's challenge based on the interpretation of the Notification provisions. Considering various factors, the Tribunal determined that the actual liability of the assessee was significantly lower than the initial demand. The Tribunal directed the appellants to pre-deposit Rs. 20 lakhs within a specified timeframe, with the possibility of waiver and stay of recovery for the remaining amount upon compliance.

In conclusion, the Tribunal addressed the issues of duty payment, penalty, SSI benefit denial, interpretation of Notification provisions, plea of limitation, and pre-deposit requirement, providing detailed reasoning and directives based on the arguments presented by both sides.