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Issues:
1. Whether duty was evaded on exports to Nepal and Bhutan. 2. Validity of duty amount and penalty imposed. 3. Applicability of Notification No. 175/86 for duty exemption. 4. Entitlement to deductions on duty amount. 5. Consideration of plea for remand and re-quantification of duty. 6. Justification for penalty imposition. Analysis: 1. The case involved a firm exporting phynyle to Nepal and Bhutan, believing duty exemption under Notification No. 175/86 applied due to low turnover. However, Central Excise Officers alleged duty evasion, leading to confirmation of duty amount and penalty by the Commissioner of Central Excise, Patna. 2. The appellant argued they acted in good faith, unaware of duty liability on exports to Nepal and Bhutan. They contested the penalty imposition of Rs. 10,000, stating it was unjustified given their lack of guilty knowledge regarding duty payment. 3. The appellant sought deductions on duty amount, including freight and non-excisable goods like 'Centranas'. They claimed entitlement to deductions under the law, which would significantly reduce the duty payable, requesting a re-quantification by the adjudicating authority. 4. The Respondent opposed the deductions, stating the appellant failed to provide satisfactory evidence or documents to support their claims during adjudication. The Respondent argued that these pleas were belated and lacked credibility, as they were not raised earlier in the proceedings. 5. The Tribunal acknowledged the duty liability on exports to Nepal and Bhutan but disagreed with the adjudicating authority's dismissal of the appellant's deduction pleas. The Tribunal ruled in favor of allowing deductions permissible under the law based on evidence provided by the appellant, remanding the matter for reevaluation. 6. Regarding the penalty, the Tribunal accepted the appellant's argument of acting in good faith, believing customs duty would be imposed by Nepal Customs if excise duty was not paid. Consequently, the Tribunal set aside the penalty of Rs. 10,000, emphasizing the lack of justification for its imposition. 7. In conclusion, the Tribunal allowed the appeal by remanding the case for reevaluation of duty amount considering the permissible deductions. The penalty was overturned, emphasizing the appellant's genuine belief in duty exemption for exports to Nepal and Bhutan.
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