2011 (8) TMI 63 - SC - Central Excise

Central Excise Wire and cables - Benefit under Notification no. 205/88 - C.E. dated 25.05.88 - Whether the insulated electrical cables manufactured by the appellant would be eligible for exemption under the above mentioned exemption notification - Since, the issue is concerned, it is no more res integral in view of the judgment delivered by this Court in the case of Nicco Corporation Ltd. v. Commissioner of Central Excise, Calcutta . v. Commissioner of Central Excise, Calcutta 2006 -TMI - 722 - SUPREME COURT OF INDIA - The facts in the said case as well as in the present case are similar and, therefore, need not consider the said issue again - In the circumstances, the first issue is decided in favour of the Revenue. imposition of penalty - Since, the issue with regard to the imposition of penalty in the present case is concerned, the Commissioner, himself in his order-in-original has stated that the issue involved in the case is of interpretational nature - Keeping in mind the said factor, the Commissioner thought it fit not to impose harsh penalty and a penalty of an amount of Rs. 5 lakhs was imposed on the appellant while confirming the demand of the duty - Decided against the assessee.

Summary

Issues:
I. Eligibility for exemption under the notification for insulated electrical cables.
II. Justification of penalty imposition.

Eligibility for Exemption:
The appellant, engaged in manufacturing insulated wires and cables, sought exemption under Notification no. 205/88 - C.E. for specially designed electrical cables used in wind mills. Revenue authorities issued show cause notices for non-payment of excise duty, leading to a demand of Rs. 66,92,604. The Tribunal upheld the demand, citing a previous case judgment. The Supreme Court referenced a similar case and held that the appellant's cables were not indispensable for wind mills, denying exemption eligibility. The appellant had paid the excise duty amount.

Penalty Imposition Justification:
Regarding penalty imposition, the Commissioner acknowledged an interpretational issue and imposed a penalty of Rs. 5 lakhs along with confirming the duty demand. The Commissioner found no concrete evidence of deliberate wrongdoing by the appellant. The Supreme Court, considering the interpretational nature of the case and lack of evidence of deliberate offense, deemed the penalty unjustified. Consequently, the Court quashed the penalty imposition and allowed the appeal, with each party bearing their own costs.