2011 (8) TMI 109 - AT - Central Excise

Demand - Notification No.245/83 CE dated 13.9.1983 - appellants contested the show-cause notice but the Dy. Commissioner of Central Excise, Mumbai.V confirmed the demand amounting to Rs. 6,62,491.17 and imposed penalty of Rs. 1,25,000/- on them - appellants case is squarely covered by the Tribunal s order cited supra in the case of M/s. Searle (India) Ltd. wherein it has been held that excise duty in explanation to the said notification covers basic excise duty as well as special excise duty - Appeal is allowed

Summary

Issues: Interpretation of excise duty under Notification No. 245/83 CE dated 13.9.83

Detailed Analysis:

Issue 1: Appeal against the order of the Commissioner of Central Excise (Appeals) dated 31/03/2001
The appeal was filed by the appellants challenging the order of the Commissioner of Central Excise (Appeals) dated 31/03/2001. The appellants received a show-cause notice demanding duty of Rs. 6,62,491.17, contending that they were not entitled to deduct Special Excise Duty from the value for computing the discount deductible under Notification No. 245/83 CE dated 13.9.1983. The Dy. Commissioner confirmed the demand and imposed a penalty, leading to the appeal before the Commissioner of Central Excise (Appeals). The appellants then approached the Tribunal against the order of the Commissioner of Central Excise (Appeals).

Issue 2: Interpretation of the term "excise duty" under Notification No. 245/83 CE dated 13.9.83
The central question in this case revolved around the interpretation of the term "excise duty" in the explanation to Notification No. 245/83 CE dated 13.9.1983. The representative for the appellants argued that the key issue to be decided was whether "excise duty" encompassed only basic excise duty or both basic excise duty and special excise duty. The representative relied on a previous Tribunal decision in the case of M/s. Searle (India) Ltd. vs CCE, Surat, where it was held that the excise duty under the said notification covered both basic excise duty and special excise duty. Based on this argument, the appellants sought to set aside the Order-in-Appeal issued by the Commissioner of Central Excise (Appeals).

Issue 3: Tribunal's decision based on precedent
After hearing arguments from both sides, the Tribunal found that the case of the appellants aligned with a previous decision in the case of M/s. Searle (India) Ltd. The Tribunal in the cited case had concluded that the explanation to the notification encompassed both basic excise duty and special excise duty under the term "excise duty." Relying on this precedent, the Tribunal set aside the Order-in-Appeal and allowed the appeal of the appellants.

This detailed analysis highlights the legal issues involved in the judgment, focusing on the interpretation of excise duty under Notification No. 245/83 CE dated 13.9.83 and the subsequent decision of the Tribunal based on precedent.