2016 (6) TMI 507 - AT - Central Excise

Benefit of notification no. 64/95-CE dated 16.03.1995 denied - exemption to specified goods from payment of duty - duty demand raised along with penalty - Held that - We have seen the correspondence by the appellant dated 02.12.2003 addressed to the Range Superintendent intimating that they would be availing benefit of notification no. 64/95-CE. It is also not disputed that the benefit was being claimed while producing the certificate from the requisite authority which were being placed before the authorities. It is also further seen that the earlier order of the Tribunal was in favour of the assessee. As such it can be reasonably concluded that the issue was debatable and arguable and might have led the assessee to a bonafide belief. Otherwise also we note that the appellant had stated the entire facts to the Revenue and as such reasoning of the original adjudicating authority that the appellant knew that the benefit was not available to them and has wrongly claimed the same, cannot be appreciated. In view of the above we hold that the first show cause notice issued on 03.04.07 for the period June 2004-Feb 2006 is barred by limitation. The confirmation of the demand in respect of the said show cause notice along with imposition of penalty is set aside. As regards the second show cause notice, the Ld. Advocate agrees that the same is within limitation period and the issue on merits stands decided against them in the referred decision of Tribunal in the case of Ordnance Factory (2011 (12) TMI 401 - CESTAT, MUMBAI ). However, as we have already held that there is no malafide on the part of the appellant, we find no reason to impose penalty upon them. Accordingly, demand raised by the second show cause notice stands confirmed along with confirmation of interest, but penalty is set aside. - Decided in favour of assesee

Summary

Issues:
Interpretation of Notification no. 64/95-CE for exemption claim on aluminum sheets supplied by VSSC, applicability of previous Tribunal decisions on similar cases, limitation period for show cause notices, imposition of penalty.

Analysis:
The judgment revolves around the interpretation of Notification no. 64/95-CE for an exemption claim on aluminum sheets supplied by VSSC. The appellants were working under a work order from VSSC, involving processes on aluminum sheets. The dispute arose when the Revenue contended that the goods manufactured were aluminum sheets and not specified items under the notification, leading to a demand notice. The appellant argued for exemption under Sl. No. 7 of the notification, citing a certificate from the Indian space research organization. The Tribunal referred to past decisions like Andhra Sugars Ltd. and Ordnance Factory cases to determine the applicability of the notification. The Tribunal agreed with the applicability of the Ordnance Factory case, denying the benefit of the notification to the appellant.

The judgment also addressed the issue of the limitation period for show cause notices. The first notice issued for the period June 2004 to Feb 2006 was deemed time-barred, leading to the setting aside of the demand confirmation and penalty imposition. However, the second notice for the period May 2006 to Feb 2007 was within the limitation period. Despite confirming the demand and interest, the Tribunal decided not to impose a penalty due to the absence of malafide intentions on the appellant's part.

In conclusion, the Tribunal disposed of the appeal by setting aside the penalty for the first notice due to limitation issues, confirming the demand and interest for the second notice based on the Ordnance Factory case, and emphasizing the absence of malafide intentions by the appellant throughout the proceedings. The judgment provided a detailed analysis of the exemption claim, previous tribunal decisions, limitation periods, and penalty imposition considerations, ensuring a comprehensive resolution of the legal issues involved in the case.