2005 (10) TMI 150 - AT - Central Excise

Summary

Issues involved: Imposition of penalty under Rule 173Q, applicability of Notification 7/2000, validity of interest under Section 11AB.

Imposition of penalty under Rule 173Q: The Appellate Tribunal held that a corrigendum or addendum to a Show Cause Notice cannot be issued after the noticee has replied to the original notice. Therefore, the proposal of penalty under Rule 173Q, issued via corrigendum on 2-1-2004, was deemed invalid.

Applicability of Notification 7/2000: The Tribunal noted that the clearances were made before the effective date of Notification 7/2000, which required additional payments. As the notification was not made known to the public at the time of clearance, and the appellants voluntarily paid the excess amount, it was concluded that there was no deliberate attempt to evade duty. Consequently, the penalty under Rule 173Q was set aside.

Validity of interest under Section 11AB: Since the duty was discharged before the introduction of Section 11AB, the Tribunal ruled that there was no basis to uphold the interest recovered under this section. As duty demands were not being pursued, the penalty and interest orders were set aside, and the appeals were partially allowed.