2007 (12) TMI 88 - AT - Central Excise

Commissioner confirmed demand for suppression, taking a view that there was no Notification for the interregnum period 1-7-2004 to 3-8-2004, which grants exemption to the assessee - appellants made a representation to the Govt. for granting exemption for the interregnum period and the Govt., after due consideration, has issued Notification 25/06 u/s 11C of the CEA exempting duty on Ethanol Blended Petrol for the interregnum period Demand is time barred

Summary

Issues:
1. Duty payment on Ethanol Blended Petrol (EBP) clearance without appropriate duty payment.
2. Applicability of Notifications 6/2002-C.E., 38, 39 & 40/2004, and 25/2006.
3. Exemption under Notification 25/2006-C.E. (N.T.) dated 20-11-2006.
4. Set aside demands and penalty based on the above Notification.

Analysis:

1. The case involves a PSU Unit appealing against Order-in-Original No. 05/2005-C.E. for clearing 6,56,000 Litres of EBP without paying the appropriate duty totaling to Rs.99,81,396/-. The appellants contested the dutiability of clearances, citing various reasons and claimed benefits under specific Notifications. The Commissioner disagreed, stating no Notification was in place for the relevant period. However, the Government later issued Notification 25/2006-C.E. (N.T.), exempting duty for the interregnum period, leading to a representation for exemption and subsequent acceptance by the Government.

2. The learned Consultant argued that due to Notification 25/2006, the question of confirming duty and penalty does not arise. The learned SDR concurred that the Notification applied to the facts of the case and the period in question. The Tribunal noted that the impugned goods were exempted from duty, known to the department, and thus, demands needed to be set aside. The absence of a Notification for a short period led to a Show Cause Notice, which was later resolved by the Government's issuance of Notification No. 25/2006, dated 20-11-2006, under Section 11C of the Central Excise Act.

3. Considering the exemption provided under Notification 25/2006, the Tribunal concluded that the demands were not sustainable. Therefore, the demands were set aside, and the appeal was allowed with consequential relief, if any. The stay application was also disposed of. The judgment highlighted the importance of relevant Notifications and the impact of governmental decisions on duty liabilities and penalty impositions.

Conclusion:
The judgment by the Appellate Tribunal CESTAT, Bangalore, emphasized the significance of Notifications in determining duty liabilities and the impact of governmental decisions on such matters. The case highlighted the necessity for clear legal provisions and timely governmental actions to address duty exemptions and related disputes effectively.