2009 (5) TMI 91 - AT - Central Excise

Exemption Chewing tobacco - The appellant firm is a manufacturer of un-branded chewing tobacco and they were availing the benefit of Notification No. 8/2003-C.E., dated 1-3-03 - A new levy on tobacco product was imposed with effect from 1-3-2005 and by a Notification No. 6/2005 dated 1-3-05 - The appellant, entertained a doubt as to whether the new levy shall be applicable to them as they were availing exemption Notification No. 8/03 and they were in correspondence with the Excise authority - It is not the case where the department was kept in darkness by the appellant about the manufacture of unbranded chewing tobacco as they have filed necessary declaration for the purpose of availing the Notification No. 8/2003 - Further, we find that the appellant has been seeking clarification from the department regarding applicability of new levy. Further, on the basis of clarification given during the visit of the officers, they immediately took the registration and paid up dues as per the effective rate of duty applying the notification 6/2005. The Notification No. 6/2005 does not contain any condition that the benefit under the said Notification is available only to a registered unit. - we set aside the demand of duty in excess of the duty payable and paid in terms of Notification No. 6/05

Summary

In the appellate tribunal CESTAT, Delhi case of 2009 (5) TMI 91, the appellant firm, a manufacturer of unbranded chewing tobacco, availed the benefit of a specific notification until a new levy was imposed in 2005. The appellant, in correspondence with the Excise authority, was unsure if the new levy applied to them. Upon a visit from Central Excise officers, they were informed of the additional levy. The original authority demanded duty, interest, and penalties, which were upheld by the Commissioner (Appeals). The appellant argued that they were under a bona fide belief they were exempt and promptly paid dues upon clarification. The tribunal found that the appellant had sought clarification from the department and promptly paid dues as per the new levy, setting aside the excess duty demand and penalties. The appeals were disposed of in favor of the appellant. The stay petitions were also resolved. The judgment was delivered by Justice R.M.S. Khandeparkar and Shri M. Veeraiyan. The appellant was represented by S/Shri Ashwani Sharma and Sudeep Vijayan, Advocates, with Shri A.K. Rastogi, DR, representing the respondent. The order was given by M. Veeraiyan, Member (T).