2009 (1) TMI 154 - AT - Central Excise

Benefit of deemed credit u/not. 6/2002-C.E. (N.T.) - Merely because the goods cleared by the respondents on the basis of CT(3) certificates were not exported and consequently duty was to be paid, it cannot be said that there was an intention to evade payment of duty - only case of the revenue is that the appellants failed to produce rewarehousing certificate and CT(3) certificate - fact that the appellants paid duty within three months of their failure to produce certificate as per the provisions of the notification show that the appellants had no such intention appeal of revenue rejected

Summary

Issues: Revenue's contention on duty liability payment and intention to evade duty.

Analysis:
1. Issue of Duty Liability Payment: The case revolved around the duty liability payment by the respondents for clearances on their final product under AR3A. The revenue contended that the duty liability should have been discharged by paying in cash and not by debiting the CENVAT credit account, as per Notification No. 6/2002-C.E. The revenue alleged an intention to avoid payment of duty by the respondents.

2. Analysis of Duty Payment: The tribunal examined Para-6 of Notification No. 6/2002-C.E. (N.T.) which states that the notification does not apply if duty has not been paid due to fraud, collusion, misstatement, or contravention with intent to evade payment. The revenue relied on this clause to deny the benefit of deemed credit to the appellants. However, the tribunal noted that there was no evidence to show an intention to avoid payment of duty by the respondents. The appellants paid the duty within three months as per the provisions of the notification, indicating no intention to evade payment.

3. Intention to Evade Duty: The revenue alleged that there was an intention to evade duty due to the wrong use of CT (3) certificate by the respondents. However, the tribunal found that the mere failure to produce certain certificates did not conclusively prove an intention to evade duty. The appellants' prompt payment of duty when the certificates could not be produced demonstrated their compliance with the notification's provisions, indicating no fraudulent intent.

4. Conclusion: The tribunal rejected the revenue's appeal, emphasizing the lack of evidence to support the claim of an intention to evade duty. The tribunal held that the appellants' actions, including timely duty payment and compliance with notification provisions, did not demonstrate any fraudulent intent. Therefore, the appeal filed by the revenue was deemed to lack merit and was rejected.

This detailed analysis of the judgment highlights the key issues of duty liability payment and the alleged intention to evade duty, showcasing the tribunal's thorough examination of the legal provisions and evidence presented by both parties.