2000 (10) TMI 709 - AT - Central Excise

Issues:
1. Duty demand on consignments received after withdrawal of exemption notification.
2. Imposition of personal penalty by Asstt. Commissioner.
3. Appeal against confirmation of demand of duty and personal penalty.
4. Compliance with Chapter X procedure for clearance of consignments.
5. Argument on limitation period for raising demand.
6. Applicability of Rule 196 for duty demand.
7. Interpretation of exemption notification regarding post-clearance conditions.
8. Trade notice clarification on end-use conditions.
9. Demand of duty on consignments cleared by another entity.

Analysis:
1. The issue revolved around the duty demand of Rs. 11,99,280 raised by Revenue on consignments received after the withdrawal of the exemption notification. The appellant argued that duty exemption was applicable at the time of clearance, and hence, no duty could be demanded post-rescission of the notification.

2. The Asstt. Commissioner imposed a personal penalty of Rs. 12 lakhs, which was set aside by the Commissioner (Appeals) due to the absence of a proposal in the show cause notice. The penalty imposition was beyond the notice's scope, leading to the appeal against the confirmation of demand and personal penalty.

3. The appellant's representative highlighted compliance with Chapter X procedure for clearance of consignments, emphasizing that exemption availability at clearance time cannot be denied later. Reference was made to a Trade Notice supporting this argument.

4. The argument on the limitation period for raising the demand was raised, asserting that the demand was time-barred as there was no charge of suppression in the show cause notice, and no proposal for a longer limitation period invocation.

5. The applicability of Rule 196 for duty demand was discussed, with the Revenue contending that duty payment was the appellant's responsibility post-notification withdrawal, and Rule 196 did not specify a time limit for demand.

6. The interpretation of the exemption notification regarding post-clearance conditions was crucial. The Tribunal held that duty could not be legally demanded for consignments received after the notification withdrawal if the exemption was applicable at the clearance time.

7. A trade notice clarification on end-use conditions supported the appellant's argument, emphasizing that the exemption applied at clearance time, and end-use conditions were post-clearance requirements.

8. The demand of duty on consignments cleared by another entity after the exemption withdrawal was deemed unjustified. The demand under Rule 196 was required to be raised against the manufacturers, as confirmed by a letter from the manufacturer agreeing to deposit the demanded amount.

9. Ultimately, the Tribunal allowed the appeal, setting aside the demand for duty on consignments received after the exemption withdrawal and those cleared by another entity, emphasizing compliance with Chapter X procedure and the applicability of exemption at the clearance time.

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