2016 (10) TMI 33 - AT - Central Excise

Demand and imposition of penalty - contravention of the various rules with intention of evading Excise duty - manufacture of ducts classifiable under sub-heading No. 7304.10 of the Central Excise Tariff Act, 1985 - Held that - in view of the decision of the Hon ble Supreme Court in the appellant s own case reported in 2006 (4) TMI 526 - SUPREME COURT , we are of the considered opinion that the issue is squarely covered in favour of the appellants. Therefore, we hold that the impugned orders are not sustainable in law and the same are set aside. When the demands are not sustainable and the same are set aside, the penalty imposed on Shri V. Seshadri, Chief Executive Officer of the appellant s firm is also set aside. - Appeal disposed of

Summary

Issues involved:
Appeal against Central Excise Orders - Classification of ducts under Central Excise Tariff - Alleged contravention of rules - Duty and penalty involved - Precedent decisions - Board's Circular - Natural Justice principles.

Analysis:
1. Classification of Ducts and Alleged Contravention:
The appeals involved a dispute regarding the classification of ducts under the Central Excise Tariff Act, 1985. The appellant, engaged in civil construction and air-conditioning solutions, faced allegations of contravening rules to evade excise duty. The investigation, triggered by a search operation at the appellant's premises, led to the issuance of a show-cause notice. The appellant denied the allegations and contended that the ducts should be classified differently based on contracts and precedents.

2. Legal Arguments and Precedent Decisions:
The appellant argued that the impugned orders did not consider binding precedent decisions, including the Tribunal's rulings in similar cases. Reference was made to Board's Circular No. 154/26/99-CX-4 and contracts presented during the proceedings. The appellant relied on various judgments, such as HVAC Systems Pvt. Ltd. and previous decisions involving ETA Engineering, to support their classification stance.

3. Decision and Rationale:
After hearing both parties and examining the records, the Tribunal found in favor of the appellants. Citing the Supreme Court's judgment in the appellant's own case, the Tribunal concluded that the issue was settled in the appellant's favor based on precedent and legal principles. Consequently, the impugned orders were deemed unsustainable in law and set aside, leading to the dismissal of penalties imposed. The Tribunal's decision was pronounced openly on 28/09/2016.

This detailed analysis encapsulates the legal judgment's core issues, arguments presented, precedent references, and the final decision rendered by the Appellate Tribunal CESTAT Bangalore in the cited case.