2008 (1) TMI 808 - AT - Central Excise

Summary

Issues involved: Interpretation of Central Excise notifications u/s 39/2003, delay in exercising option for availing exemption benefit, imposition of duty and penalty.

Interpretation of Central Excise notifications:
The appellant cited Notifications No. 49/2003 and 76/2003, emphasizing the requirement to submit an option to avail Central Excise exemption benefit. The appellant commenced production before exercising the option, leading to a delay. The appellant argued that the exemption should apply from the date of production commencement or publication of the notification, not from the option exercise date. The department had granted benefits from the option exercise date in similar cases, imposing only nominal penalties.

Delay in exercising option for availing exemption benefit:
The appellant delayed exercising the option, prompting the Revenue to seek duty recovery for the period between production commencement and option exercise. The appellant contended that denying the benefit due to the delay was unjust, especially when the department had granted benefits in similar cases with nominal penalties. The Tribunal acknowledged the delay but found it harsh to deny the entire benefit solely based on the delay.

Imposition of duty and penalty:
The Departmental Representative argued that the exemption notification's benefits are subject to conditions, and the appellant must fulfill them to claim the exemption. Despite physical concessions for units in Uttaranchal, fulfilling conditions was necessary. The Tribunal noted that the appellant's delay in exercising the option should not result in denying the entire benefit. Consequently, the Tribunal ordered a full waiver of the demanded duty and imposed penalty until the appeal's final decision, recognizing a strong case in favor of the appellant.

Final Hearing:
The matter is scheduled for final hearing in due course, indicating further proceedings to resolve the issues raised during the appeal.