2017 (10) TMI 1172 - AT - Central Excise

Area Based Exemption - Benefit of N/N. 50/2003 dated 10.6.2003 - denial of benefit on the ground that appellant has not filed the declaration under N/N. 76/2003 dated 5.11.2003 - Held that - identical issue has come up before the Tribunal in the case of Aditya Packaging vs. CCE, Meerut I 2017 (6) TMI 1024 - CESTAT NEW DELHI , where it was held that the conditions inserted in N/N. 50/2003-CE are mandatory and cannot be held as mere procedural requirement - demand upheld. Penalty - Held that - this was interpretation of law and the appellate authority has already reduced the penalty from Rupees Six lakh to Rupees Three lakh. But in the peculiar facts and circumstances of the case, the penalty is on higher side, therefore, penalty reduced. Appeal allowed in part.

Summary

Issues Involved:
Exemption from Central Excise duty under Notification No. 50/2003 due to failure to file a declaration under Notification No. 76/2003.

Analysis:
The case involved the appellant, a manufacturer of herbal cosmetics, who availed exemption from Central Excise duty under Notification No. 50/2003 but was denied the benefit due to not filing a declaration under Notification No. 76/2003. The Tribunal noted that the conditions for availing the exemption were specifically inserted after the issue of the notification, emphasizing the importance of compliance. The Tribunal referred to a previous case where it was established that the conditions were mandatory and not mere procedural requirements. The Tribunal cited the Hon'ble Supreme Court's stance on substantial compliance, highlighting the significance of meeting statutory prerequisites to achieve the intent of the statute. It was concluded that the appellant failed to fulfill the mandatory condition, leading to the dismissal of the appeal.

Regarding the penalty imposed, the Tribunal acknowledged the reduction by the appellate authority but deemed it excessive in the circumstances. Consequently, the penalty was reduced to a token amount of Rupees One lakh. The appeal was partially allowed based on the above considerations.