1999 (12) TMI 261 - AT - Central Excise

Summary

Issues:
Challenge to penalty imposed by Commissioner (Appeals) for non-compliance with Trade Notice No. 20/93 after allowing Modvat credit.

Analysis:
The appellants contested the penalty imposed by the Commissioner (Appeals) after being allowed Modvat credit. The Commissioner (Appeals) upheld the penalty for non-compliance with Trade Notice No. 20/93, despite allowing the credit. The appellants argued that the penalty was unjust as the Trade Notice did not require intimation for the type of inputs they used. They relied on a Tribunal decision and a previous Tribunal order in their favor to support their case.

Analysis:
The appellants' advocate argued that the penalty for non-compliance with the Trade Notice was unsustainable after allowing Modvat credit. He referenced a Tribunal decision stating that procedural lapses should not lead to denial of Modvat credit. Additionally, he pointed out a previous Tribunal order in the appellants' favor, setting aside a penalty for a similar issue. The advocate emphasized that contravening a Trade circular should not warrant a penalty under Rule 173Q.

Analysis:
The Junior Departmental Representative (JDR) contended that the Commissioner had the authority under Rule 173H to impose conditions on assessees regarding excisable goods. He argued that the Trade Notice, requiring D-3 information for certain inputs, fell within the scope of Rule 173H. The JDR referred to a Supreme Court decision upholding regulations issued under the Customs Act, emphasizing the need for discretion in administering such legislation.

Analysis:
Upon reviewing the arguments and case law cited, the judge found that the penalty imposed by the Commissioner for non-compliance with Trade Notice No. 20/93 could not be upheld. The judge determined that Trade circulars issued by the Commissionerate did not hold the same status as Rules, which could result in penal consequences under Rule 173Q. Consequently, the judge allowed the appeal and set aside the penalty imposed on the appellant.