9911796707
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Issues:
1. Duty demand under Rule 9(2) read with Section 11A of the CE Act 2. Imposition of personal penalty under Rule 9(2) read with Rule 173Q of Central Excise Rules, 1944 3. Alleged contravention of various Central Excise Rules related to manufacturing and clearance of dolomite powder 4. Failure to obtain Central Excise License and pay Central Excise duty 5. Lack of filing classification list and price list 6. Alleged removal of dolomite powder without payment of appropriate Central Excise duty 7. Dispute regarding excisability of dolomite powder 8. Invocation of larger period for demand confirmation 9. Allegation of suppression and clandestine removal 10. Bona fide belief regarding non-dutiability of the item Analysis: 1. The appeal stemmed from an Order-in-Original confirming duty demand and imposing a personal penalty for contravention of Central Excise Rules related to dolomite powder manufacturing and clearance. The appellants argued they had followed Central Excise formalities, filed a declaration, and obtained a license, believing the item was not excisable based on High Court judgments and Tribunal decisions. The Additional Collector's order lacked grounds for invoking Section 11A and did not address the issue of suppression or clandestine removal. 2. The Tribunal noted that the appellants acted in good faith based on their belief in the non-dutiability of the item, supported by High Court judgments and Tribunal decisions. The M.P. High Court's stance on the transformation of dolomite lumps into powder as not creating a new commodity influenced the appellants' belief. The Tribunal emphasized the importance of invoking the proviso to Section 11A in the show cause notice, which was not done in this case, leading to the demand for an extended period being set aside. 3. The Tribunal highlighted the necessity of incorporating the ingredients of the proviso to Section 11A in the show cause notice, as mandated by Supreme Court decisions. Since the department failed to bring out such ingredients and the Additional Collector did not provide a hearing or findings, the demands for an extended period were deemed unjustified. The Tribunal ultimately allowed the appeal, considering the appellants' bona fide belief in the non-excitability of the item and the absence of clandestine removal, suppression, or valid grounds for invoking Section 11A.
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