2011 (12) TMI 437 - AT - Central Excise

Duty demand - Denial of exemption under Notification No. 108/95-C.E. dated 28-8-1995 - Held that - Revenue has raised a very travail for a matter involving revenue of only Rs. 20, 481/- in times when the policy of the Revenue is to trust the assessees. There was no reason to raise such demands on the ground that the certifying authority did not issue separate certificates for each factory of the appellants or only photocopy was produced and not the original. Since no actual loss of revenue has been brought out in the proceedings we set aside the orders passed by the lower authorities to give relief to the appellants from all dues arising out of the proceeding - Decided in favour of assessee.

Summary

Issues:
Exemption under Notification No. 108/95-C.E.
Validity of certificate for exemption
Demand of excise duty
Penalty under Rule 25(a) of Central Excise Rules, 2002
Appeal against Commissioner (Appeals) order

Exemption under Notification No. 108/95-C.E.:
The appellants, engaged in manufacturing tyres, tubes, and flaps, claimed exemption under Notification No. 108/95-C.E. for supplying tyres worth Rs. 1,98,840 to projects funded by the World Bank. The issue arose when, at the time of clearance, they could only provide a photocopy of the certificate instead of the original, which was issued for three units without specifying the quantity of goods for each factory. The Revenue contended that the exemption was improper, leading to a demand of Rs. 20,481 in excise duty and a proposed penalty under Rule 25(a) of Central Excise Rules, 2002.

Validity of certificate for exemption:
The appellants argued that they cleared the authorized quantity as per the certificate, which they couldn't produce during clearance as the original was with another unit. They maintained that there was no evidence of false certification or exceeding the authorized quantity. The Revenue's representative supported the demand based on the order-in-appeal.

Demand of excise duty and penalty:
The Tribunal, after considering both sides, noted the trivial amount involved (Rs. 20,481) and criticized the Revenue for creating unnecessary trouble when the policy is to trust taxpayers. They found no proof of actual revenue loss and questioned the basis for demanding payment due to issues with the certificate. Consequently, the Tribunal set aside the lower authorities' orders, providing relief to the appellants from all dues arising from the proceedings.

Appeal against Commissioner (Appeals) order:
The appellants' appeal, challenging the Commissioner (Appeals) decision, was successful as the Tribunal ruled in their favor, emphasizing the lack of concrete evidence of revenue loss and the disproportionate actions taken by the Revenue over a minor amount. The Tribunal's decision resulted in the dismissal of the demand for excise duty and penalty, providing significant relief to the appellants.