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2010 (1) TMI 1034 - AT - Central Excise
Issues involved: Liability to pay duty on excess quantity filled in bags by the assessee u/s 11A, applicability of previous tribunal decision and circular allowing difference in weight for levy of excise duty.
Liability to pay duty: The case involved M/s. Finolex Industries Ltd. filling excess quantity in bags ranging from 0.06% to 0.39%. A show-cause notice was issued for the period from April 1995 to June 2000, demanding duty on the excess quantity filled by the company. Applicability of previous tribunal decision: The Commissioner, relying on a previous tribunal decision in the case of Reckitt & Coleman India Ltd., held that the assessee was not liable to pay duty on the excess quantity filled in the bags. The tribunal decision stated that when duty rates are specific, filling excess quantity cannot be a ground for duty demand. Arguments by the Revenue: The Revenue argued that the Commissioner wrongly relied on the Reckitt & Coleman India Ltd. case. They cited a decision by the Hon'ble High Court of Madras in Carborundum Universal Ltd. v. Union of India, stating that the limitation under Section 11A is not applicable when the demand arises from stock taking under Rule 223A. The Revenue also referred to a circular allowing a 9% difference in weight for levy of excise duty on Pan Masala. Tribunal's decision: The tribunal found the Revenue's arguments unconvincing. It held that the Reckitt & Coleman India Ltd. decision was applicable to the case at hand. The tribunal distinguished the case from the Madras High Court decision, stating that the demand did not arise from stock taking but from verifying the assessee's records to determine the differential duty. Consequently, the tribunal rejected the Revenue's appeal, providing benefit to the respondents. Conclusion: The tribunal upheld the decision that the assessee was not liable to pay duty on the excess quantity filled in the bags, based on the specific duty rates and the findings from the investigation and verification of records.
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