2009 (1) TMI 579 - AT - Central Excise

Summary

Issues:
Denial of benefit under Notification No. 41/99-C.E. for tea clearances in 2001-02, duty demand, interest, and penalty under Section 11AC of the Central Excise Act.

Analysis:
The Appellate Tribunal, CESTAT, Chennai, dealt with the denial of benefits under Notification No. 41/99-C.E. to the appellants for tea clearances in 2001-02. The notification provides an exemption for tea manufactured and cleared by a bought leaf factory subject to certain conditions, including filing an undertaking and the factory working for at least six months in the previous year. The lower authorities found that the appellants did not fulfill these conditions. The appellants argued before the Tribunal that they had indeed furnished the required declaration and provided documents to show the factory's operation during the relevant period.

The Tribunal considered both parties' submissions. It noted that the appellants had not claimed before the lower authorities that they met the notification requirements. The appellants attributed this to the inexperience of new directors. However, the Tribunal found the conditions straightforward and not requiring significant experience to fulfill. Despite the appellants' arguments, no reliable evidence was presented to establish that the declaration was filed or that the factory worked for the required period. The department's consistent position was that the factory operated only for three days during the relevant time. The Tribunal upheld the duty demand and the penalty imposed under Section 11AC, concluding that the appeal lacked merit and dismissed it.

In conclusion, the Tribunal found that the appellants failed to meet the conditions set out in Notification No. 41/99-C.E. for the exemption claimed for tea clearances in 2001-02. The lack of evidence supporting the appellants' claims, coupled with the department's position on the factory's operation, led to the dismissal of the appeal. The duty demand and penalty under Section 11AC were upheld, emphasizing the importance of compliance with statutory requirements for claiming exemptions under the Central Excise Act.