2018 (1) TMI 41 - AT - Central Excise

Penalty - SSI Exemption - Difference of opinion - Held that - In view of the difference of opinion emerging between Hon ble Members on the issue of penalty on Sh. Prem Khanna, M. D. in appeal no.E/3226/2009, the registry is directed to place the matter before Hon ble President for nominating the third Member for resolving the following - Whether in the facts and circumstances of the case the matter pertaining to penalty on She Prem Khanna, M. D. should be remanded to the adjudicating authority, as held by Member (Judicial)? - matter referred to Third Member.

Summary

Issues:
1. Assessment of duty on final products exceeding small scale exemption limit.
2. Assessment of duty on bar code printing ribbon under Section 4 or Section 4A of the Central Excise Act.
3. Verification of sales to institutions/hospitals for exemption from MRP printing requirement.
4. Entitlement to Cenvat Credit on duty paid on inputs.
5. Remand for verification of documentary evidence and Cenvat credit.
6. Penalty imposition on Managing Director for non-payment of duty.

Analysis:
1. The appellant, engaged in manufacturing paper labels and bar codes, was found not paying duty after crossing the small scale exemption limit. Proceedings were initiated, resulting in demand confirmation and penalties imposition.
2. The appellant admitted crossing the exemption limit and agreed to pay duty on excess clearances. Dispute arose regarding the assessment of bar code printing ribbon under Section 4 or Section 4A of the Central Excise Act.
3. The Tribunal remanded the matter for verifying sales to institutions/hospitals to determine the requirement of MRP printing on bar code labels.
4. The appellant claimed entitlement to Cenvat Credit on duty paid on inputs, which was rejected by authorities alleging clandestine activity. Citing precedents, the appellant argued for the credit's extension.
5. The Tribunal allowed the appeals by remanding the matter for verification of documentary evidence and Cenvat credit entitlement.
6. The penalty on the Managing Director for non-payment of duty was upheld, as admitted liability existed for not paying duty after crossing the SSI limit for four years. The matter was referred to the President due to a difference of opinion on the penalty imposition.

This detailed analysis covers the assessment of duty, Cenvat credit entitlement, penalty imposition, and the remand for verification, providing a comprehensive understanding of the judgment.