2001 (1) TMI 267 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty imposition confirmed by Commissioner of Central Excise.
2. Dispute over excisability of pan masala product.
3. Show cause notices issued for duty payment and confiscation of seized goods.
4. Contestation of show cause notices on grounds of limitation and exemption entitlement.
5. Acceptance of appellants' version and duty demand confirmation.
6. Appeal filed by the appellants against the Commissioner's order.

Analysis:
1. The appellants contested duty demand and penalty imposed by the Commissioner, challenging the excisability of their pan masala product. The dispute arose when the High Court dismissed their writ petition, leading to show cause notices for duty payment on clearances made during specific periods.

2. The appellants disputed the duty liability based on limitation and claimed entitlement to an exemption under Notification No. 179/77-C.E., stating non-use of power in manufacturing pan masala. The Commissioner, however, rejected their contentions, confirming duty demand and imposing a substantial penalty.

3. The Tribunal analyzed the timeline of events, including the seizure of goods, writ petition filing, and subsequent show cause notices. It highlighted the appellants' communication regarding non-use of power in manufacturing and packing pan masala, emphasizing the acknowledgment by the Excise Department.

4. The Tribunal scrutinized the legal aspects, including the applicability of the Explanation to Section 11A(1) of the Central Excise Act. It referenced relevant case law to determine the Revenue's obligation to issue timely show cause notices and the appellants' right to exemption under Notification No. 179/77-C.E.

5. Ultimately, the Tribunal ruled in favor of the appellants, setting aside the duty demand for a specific period and affirming it for another. The penalty amount was significantly reduced based on the evidence provided by the appellants regarding their compliance with the exemption notification.

6. In conclusion, the Tribunal disposed of the appeal, providing a detailed analysis of the issues raised, the legal arguments presented, and the final decision regarding duty demand and penalty imposition, ensuring a comprehensive review of the case.