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TMI Blog2016 (3) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ermitted by the Rules itself. In fact, the appellants paid much higher duty than the actual liability as arrived at after rejection of their application. Considering the above position, we find the impugned order is not sustainable and set aside the same. - Decided in favour of assessee - Excise Appeal No. E/982/2007-EX(DB) - Final Order Nos.50231/2016 - Dated:- 15-2-2016 - SHRI S.K. MOHANTY, MEMBER (JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri B.L. Narsimhan, Advocate For the Respondent : Shri Sanjay Jain, DR ORDER PER B. RAVICHANDRAN: This appeal is directed against order dated 22.01.2007 of Commissioner (Appeals), Central Excise, Indore. 2. The brief facts of the case ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying central excise duty on provisional basis in terms of sub-rule (2) of Rule 96 ZNA. Later, when the application for the scheme was rejected by the Commissioner, the amount already paid was adjusted against the normal duty liability in terms of Section 3 and they were granted refund of excess payment. The penalty imposed under sub-rule 5 (ii) of Rule 96 ZNC is not legally sustainable as they were not operating under the Compounded Levy Scheme. They were discharging duty on the provisional basis till the disposal of their application. He also relied on the decisions of this Tribunal in support of his contention. 4. Ld. AR reiterated the findings of the Original Authority and stated that when the payment of duty in terms of Compounded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is rejected, the textile processor shall be liable to pay excise duty on the entire clearances from 1.5.20001 onwards as if the Compounded Levy was not applicable to him and the duty paid under the Compounded Levy shall be adjusted against his duty liability under advelorem levy. 7. Further, the Tribunal in Nav Bharat Udyog - 2004 (167) ELT 292 (Tribunal-Delhi) held that when the assessee has paid excess duty under the Compounded Scheme and later found to be not eligible for the Scheme, no penalty can be imposed. In an identical set of legal provisions of another Compounded Levy Scheme under Rule 96 ZO, 96 ZP and 96 ZQ, the Hon ble Supreme Court held that imposing penalty equivalent to the duty is arbitrary and excessive and is without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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