2007 (3) TMI 646 - AT - Central Excise

Summary

Issues involved: Appeal against order confirming demand and penalty on company and director for availing Cenvat credit without maintaining separate accounts for dutiable and exempted goods.

Summary:
1. The appeals challenged the order confirming demand and penalties imposed on the company and director for availing Cenvat credit without separate accounts for dutiable and exempted goods.
2. The appellant's factory was found manufacturing both types of goods without separate accounts, leading to a demand notice for 8% of the value of exempted goods cleared.
3. The appellant argued that a retrospective amendment allowed for the recovery of the 8% amount, challenging the penalties imposed on the company and director.
4. The respondent justified the penalties, stating the company was aware of the law but did not comply, and the director was responsible for the company's affairs.
5. The Tribunal noted the lack of separate inventory maintenance but acknowledged the retrospective amendment for recovery, citing a similar case where penalties were set aside.
6. The Division Bench considered the retrospective amendment and ruled in favor of setting aside penalties and interest due to non-enforcement of penal provisions.
7. The Tribunal found the current case aligned with the precedent, setting aside penalties and interest while upholding the 8% demand on exempted goods.
8. Personal penalties on the director were deemed inappropriate due to the demand arising from a retrospective amendment.
9. The appeals were allowed regarding penalties and interest, setting aside the impugned order partially and confirming the 8% demand on exempted goods.