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TMI Blog2024 (8) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... en decided by the Division Bench of this Tribunal in M/S PARVATIYA PLYWOOD PRIVATE LIMITED AND AKHILESH PRATAP MD VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX-MEERUT-II AND COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, CUSTOMS AND CENTRAL EXCISE-DEHRADUN [ 2022 (12) TMI 451 - CESTAT NEW DELHI] where it was held that ' the appellant is entitled to the benefit of recalculation of demand on cum- duty basis in accordance with explanation to Section 4(1)(b) of the Central Excise Act. We find that admittedly appellant have not collected Central Excise duty in addition to the sale price, in view of their claim of Area based exemption. Thus, the appellant shall be entitled to benefit of calculation of duty on cum-duty-price.' Cum duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the benefit of the area based exemption under the provisions of the Notification No. 50/2003-CE dated 10.06.2003. On scrutiny of the records of the appellant, the department alleged that the khasra numbers on which the appellant unit is situated, is not notified in the Annexure II or III appended to the said Notification dated 10.06.2003 and thus, was not entitled to avail exemption from payment of excise duty. 2.1. A show cause notice dated 11.12.2020 was issued to the appellant demanding central excise duty of Rs. 1,67,53,510/- along with interest and penalty under the provisions of Section 11AC was also proposed on the appellant. The notice also proposed penalty under the provisions of Rule 26 of the Central Excise Rules, 2002 on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emption. Consequently, he contended that as the appellant has to pay duty on final product for which Cenvat Credit on inputs as admissible needs to be allowed. 3.1 Learned counsel further submitted that during the relevant period, the appellant had used duty paid inputs in manufacture of final product. However, as the appellant had been denied the exemption under Notification No. 50/2003-CE, a plea was made before the Commissioner (Appeals) to allow cum- duty benefit and Cenvat Credit on the inputs used in manufacture of final product to be permitted. In support of his submissions, the learned counsel relied upon the decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise vs. Mahavir Aluminium Limited [2007 (212) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor was under the bonafide belief that the appellant was entitled to area based exemption. As the eligibility to the benefit of the notification was being contested, the appellant had not charged any duty from their customers. Consequently, there is no mens-rea on the part of the Director, hence, the penalty should be set-aside. 4. The learned authorized representative for the Revenue supported the impugned order and submitted that:- a) There is no evidence on the record that the inputs claimed to be used, were duty paid as no invoices were produced before the authority. (b) There is no evidence that the tax element has not been included in the cost of inventory. (c) No evidence has been placed on record that in the books of account, duty p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty-price. 12. We further hold in the facts and circumstances that the appellant shall be entitled to the benefit of Cenvat credit on inputs and input services and the demand payable shall be re-calculated accordingly, in view of the clear mandate of the Central Excise Act r/w Cenvat Credit Rules. XXXXX XXXXX XXXXX XXXXX 14. So far, penalty under Section 11AC is concerned, we hold that there is no case of mis-representation, misstatement, suppression or fraud on the part of the appellant. The appellant were under bona fide belief in claiming the Area based exemption from Central Excise duty, as several other manufacturers located in the same locality, where also extended the benefit of Area based exemption. Under such undisputed facts, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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