2009 (4) TMI 822 - AT - Central Excise

Summary

Issues involved: Interpretation of Notification No. 8/2003, applicability of duty payment on goods cleared from different units, justification for penalty under Section 11AC, plea of time bar, entitlement to exemption and refund of duty paid.

Interpretation of Notification No. 8/2003:
The appellant, a manufacturer of MF Resin, had two units and followed different procedures for duty payment at each unit. The Revenue contended that different procedures cannot be followed for units owned by the same entity. The appellant argued that goods cleared from Unit-II were branded goods and thus not subject to the Notification. However, the authorities did not accept this argument. The appellant demonstrated that the aggregate clearances from both units did not exceed the exemption limit of Rs. 1 crore. Additionally, evidence was presented to show that the units were in a rural area, potentially exempting even branded goods from duty. Consequently, the duty demand on clearances from Unit No. I was deemed unjustified, leading to the appeal being allowed.

Justification for penalty under Section 11AC:
The appellant contended that there was no basis for imposing a penalty under Section 11AC given the circumstances of the case. The authorities did not find merit in this argument, but the Tribunal ultimately set aside the penalty considering the overall facts and arguments presented.

Plea of time bar:
The appellant argued that the demand was time-barred as the Central Excise officers were aware of the existence of both units since 2001 or at least from 30-12-2004. They asserted that nothing new had been discovered by the Department to justify the demand. Despite the rejection of this plea by the Commissioner, the Tribunal did not find any justification for the demand, further supporting the appellant's position.

Entitlement to exemption and refund of duty paid:
The appellant claimed that if the goods were not considered branded, they were entitled to full exemption and refund of duty paid. The Commissioner's decision to demand interest was challenged, as the appellant believed they were entitled to a refund based on the findings. Ultimately, the Tribunal sided with the appellant, allowing the appeal and providing consequential relief in line with their arguments and evidence presented.