2010 (2) TMI 1177 - AT - Central Excise

Summary

Issues involved: Confirmation of Central Excise duty, penalties, and reduction of penalty under Section 11AC.

Confirmation of Central Excise duty: The appellants, engaged in packing and re-packing of automobile parts, were found to be liable for Central Excise duty under Notification No.11/2006-CE (NT) u/s 4A of the Central Excise Act, 1944. The duty demand was based on the value of MRP after a certain date. However, the appellants argued that the stock in question was available before the duty imposition date and should not be subject to duty upon subsequent sale.

Penalties: The Commissioner reduced the penalty imposed on the appellants, which was challenged by the Revenue. The Revenue contended that the duty demand should be confirmed and penalties enhanced to match the duty amount, citing a precedent related to penalty under Section 11AC.

Judgment: The Tribunal referred to a previous case and Supreme Court decisions to support the appellants' argument. It was held that goods manufactured before the duty imposition date and cleared thereafter should not be subject to duty. Therefore, the duty, interest, and penalties imposed on the appellants were set aside, and the appeals were allowed. The Revenue's appeal was rejected.

This judgment highlights the importance of the timing of duty imposition and the applicability of penalties under Section 11AC in Central Excise cases.