2003 (11) TMI 266 - AT - Central Excise

Summary

Issues: Duty demand based on denial of Notification No. 10/97 benefit, imposition of penalty, claim for interest, misdeclaration allegation, invocation of proviso to Section 11A, setting aside duty demand, penalty, and interest.

In this case, the duty demand was raised due to the denial of the benefit of Notification No. 10/97 to air-conditioners cleared by the appellant. The appellant had claimed exemption under this Notification for supplies made to research institutions. A show cause notice alleged misdeclaration and proposed duty recovery under Section 11A of the Central Excise Act, 1944, along with penalty imposition. The duty demand was confirmed post adjudication, along with penalty and interest claims.

During the appeal, the appellants did not dispute the impugned order on merits but challenged the demand for the extended period under Section 11A proviso. They argued that no misdeclaration occurred as the facts were known to the authorities, supported by certificates from research institutions for each clearance. The Tribunal noted that all clearances were backed by eligibility certificates from research institutions, without any collusion allegations. Consequently, the allegation of misdeclaration was deemed unsustainable, leading to setting aside the demand exceeding Rs. 1,30,385.

The Tribunal clarified that when a demand falls within the normal period under Section 11A, penalties and interests are not applicable. Therefore, the imposition of penalty and interest was also revoked. As a result of the above findings, the appeal was partially allowed by overturning the duty demand exceeding Rs. 1,30,385 and nullifying the penalty and interest charges.