1995 (10) TMI 145 - AT - Central Excise

Summary

Issues:
1. Liability of penalty under the Central Excises & Salt Act, 1944.

Analysis:
The appeal in this case was against an order demanding a differential duty and penalty under the Central Excises & Salt Act, 1944. The appellant did not dispute the duty liability but contested the sustainability of the penalty. The issue revolved around the appellant's alleged deliberate evasion of duty and wrongful availment of exemption related to moped tyres under Notification No. 41/89. The appellant argued that the understanding of the department regarding the categorization of tyres for concessional duty was unclear. The inspector had allowed provisional clearance of goods, indicating ambiguity in the assessment. The appellant, in good faith, believed the assessment was provisional and cleared the goods at concessional rates, passing on the duty incidence to consumers without collecting additional tax. The Automotive Tyres Manufacturers' Association confirmed the goods fell under the moped category eligible for concessional rates. The appellant contended that the penalty was unjustified due to the bona fide belief and physical control over the goods.

The key contention was whether the appellant was liable for penalty under Rule 209A. The Notification No. 19/92, providing concessional rates for moped tyres, came into effect from 1-3-1992. The inspector permitted provisional clearance of specific tyre sizes under the moped category. Additionally, the association clarified the categorization of moped tyres for duty purposes. The appellant passed on the duty incidence to consumers and did not collect extra tax. The goods were under physical control. Considering these circumstances, the tribunal found no evidence of mala fide intent or deliberate evasion of duty by the appellant. The tribunal concluded that in penal proceedings, the appellant should benefit from the doubt. Therefore, the penalty was set aside, and the appeal was allowed with consequential relief.