2002 (2) TMI 185 - AT - Central Excise

Summary

Issues:
- Central Excise duty demand for the years 1996-97 and 1997-98
- Penalty imposition under Section 11AC and Rules 9(2), 173Q or 226
- Applicability of exemptions under Notification No. 1/93-C.E. and No. 84/94-C.E.
- Penalty regulation under amended provisions of Section 11AC

Central Excise Duty Demand:
The appellants were found manufacturing forgings for valves of L.P.G. gas stoves and brass rods without possessing Central Excise Registration. The Central Excise authorities issued a show cause notice alleging clearances without invoices, accounting, or duty payment. The Addl. Commissioner confirmed a duty of Rs. 13,06,749/- for both years, with a penalty imposed under Section 11AC read with Rule 173Q. The Commissioner (Appeals) directed a rework of the duty amount based on assessable value considerations.

Penalty Imposition:
The Addl. Commissioner imposed a penalty equal to the confirmed duty on the appellants. The Commissioner (Appeals) directed a revision of the penalty considering the reduced duty amount. The appellants appealed against the penalty and duty demands, arguing for a reduced penalty under amended Section 11AC provisions.

Exemption Applicability:
The appellants contended that the value of goods supplied to job workers should be exempted under Notification No. 84/94-C.E. The Commissioner (Appeals) directed the original authority to reconsider this contention along with the duty rework. The conditions for exemption under Notification No. 84/94-C.E. were analyzed, and the appellants' compliance with these conditions was questioned.

Penalty Regulation under Amended Section 11AC:
The appellants argued for a penalty reduction under amended Section 11AC provisions, citing payment made before the show cause notice. The respondents opposed these grounds, stating they were not raised earlier. The original authority was directed to consider these arguments along with the previous directions by the Commissioner (Appeals).

In conclusion, the appeal was allowed by way of remand for the original authority to reconsider the duty demands, penalty imposition, and exemption applicability in light of the appellants' contentions and the Commissioner (Appeals) directions. The miscellaneous petition filed by the appellants was also disposed of in the same terms.