2011 (2) TMI 623 - AT - Central Excise

Duty liability - Exemption Notification No. 5/98-C.E., dated 2-6-98 - Chapter X procedure - No dispute that the appellants had cleared Naptha from their premises based upon the CT-2 certificate issued by the Range Superintendent of RCF - On bare perusal of the said Chapter X procedure, find that if any liability to duty, due to the shortage or wrong consumption or wrong availment of the benefit of notification arises, the consignee is liable to discharge the duty liability - the duty cannot be demanded from the appellant - Decided in favour of assessee.

Summary

Issues involved:
1. Allegations exceeding show-cause notice in confirmation of demand.
2. Liability of duty on goods cleared under exemption notification.

Issue 1: Allegations exceeding show-cause notice in confirmation of demand:
The appeal was against an order-in-original concerning the clearance of Naptha under a CT-2 certificate to a company. The revenue authorities contended that since the certificate was issued under a rescinded notification, duty was liable. The appellants challenged the show-cause notice, arguing that a subsequent notification continued the exemption. The counsel cited a Supreme Court case and a Tribunal order to support their position. The adjudicating authority confirmed the demand, going beyond the show-cause notice. The Tribunal found that the authority had exceeded the notice's scope, citing relevant legal precedents in favor of the assessee.

Issue 2: Liability of duty on goods cleared under exemption notification:
The key question was whether the appellant was responsible for discharging duty liability on goods cleared under an exemption notification. The show-cause notice alleged that the certificate became invalid due to rescission of the notification. However, the adjudicating authority's findings revealed a separate investigation into the consignee's misuse of the exemption. The Tribunal noted that the duty liability should fall on the consignee, as per Chapter X procedures. Since the consignee had already faced a demand notice, the duty could not be demanded again from the appellant. Consequently, the Tribunal set aside the impugned order and allowed the appeal.

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