2005 (8) TMI 129 - SC - Central Excise

Cenvat/Modvat Credit - Penalty - Denial of Exemption under under Rule 8 of the Central Excise Rules, 1944 - The ground of refusal, inter alia, was that the appellant had not produced the certificate of entitlement from the Registrar of Newspaper within the stipulated period specified in the notification and, therefore, had not fulfilled the pre-condition for the grant of exemption - whether the appellant is entitled to reverse the entry relating to the Modvat debited by it on the duty paid inputs during April 1995 - Held that - Additionally, the appellant is aggrieved by the imposition of penalty on the appellant by the Assistant Commissioner of Central Excise. According to the appellant, it was denied the exemption for April 1995 because of the failure of the Registrar of Newspapers to issue the certificate of entitlement to the appellant within reasonable time - Accordingly, the Appeal is disposed of by permitting the appellant to reverse the debit entry relating to the consumption of pulp for the month of April, 1995, and also setting aside the penalty imposed by the Assistant Commissioner of Central Excise - Decided in favour of assessee.

Summary

Issues: Exemption on manufacture of newsprint, Delay in producing certificate of entitlement, Imposition of penalty

Exemption on manufacture of newsprint:
The appellant, a manufacturer of newsprint, was granted exemption under Rule 8 of the Central Excise Rules, subject to conditions specified by the Central Government. The exemption was to be granted only for quantities of newsprint authorized by the Registrar of Newspaper for India, with a requirement to produce a certificate within a specified period. The appellant was refused exemption for April 1995 due to failure in producing the certificate within the stipulated time. The appellant had paid the excise duty for that month but sought to reverse the entry related to Modvat debited on duty paid inputs. The court allowed the appellant to reverse the debit entry for the consumption of pulp for April 1995.

Delay in producing certificate of entitlement:
The appellant's grievance included the delay in receiving the certificate of entitlement from the Registrar of Newspapers, which led to the denial of exemption for April 1995. The appellant argued that the delay was due to the Registrar's failure to issue the certificate within a reasonable time. The Assistant Commissioner of Central Excise had imposed a penalty on the appellant, which the appellant contested. The court, upon hearing the arguments, set aside the penalty imposed by the Assistant Commissioner of Central Excise.

Imposition of penalty:
The appellant was aggrieved by the penalty imposed by the Assistant Commissioner of Central Excise. The appellant contended that the denial of exemption for April 1995 was a result of the Registrar of Newspapers' delay in issuing the certificate of entitlement. The court noted the appellant's arguments and, with no objection from the Revenue, disposed of the appeal by permitting the appellant to reverse the debit entry for the consumption of pulp for April 1995 and by setting aside the penalty imposed by the Assistant Commissioner of Central Excise.