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of <h1>Appeal Allowed, Penalty Set Aside: Assessee's Right to Contest Issues Without Facing Penalties</h1> <h3>RELIANCE INDUSTRIES LTD. Versus COMMR. OF C. EX., MUMBAI</h3> The Appellate Tribunal CEGAT, Mumbai allowed the appeal, setting aside the order demanding duty and imposing a penalty. The Tribunal found the penalty ... Exemption notification - Date and time of coming into effect - Penalty - Imposition of Issues:1. Applicability of Notification 103/95 from 4th July, 1995.2. Demand of duty and penalty for goods cleared on that date.3. Challenge limited to penalty imposition.4. Justification for penalty imposition based on non-compliance.Analysis:1. The Commissioner held that Notification 103/95 would apply from 4th July, 1995, affecting the polyester yarn manufactured by the appellant under Notification 36/95. Duty was demanded for goods cleared on that date, despite correct duty payment from the next day onwards.2. The appellant's counsel did not contest the duty levy, given adverse Supreme Court judgments, focusing the appeal on the penalty issue. The argument was that the notification was known only on 5th July, 1995, leading to duty payment at the higher rate. The contention was that non-compliance with a letter from the Superintendent was not a valid reason for penalty imposition.3. The department argued that the law mandated duty payment on the clearance date, citing the Supreme Court's decision in Pankaj Jain Agencies v. UOI, 1994 (72) E.L.T. 805. The notification's effective date is when it is officially published, not when known locally.4. The Tribunal emphasized that the appellant likely became aware of the notification on 4th July, 1995, making same-day compliance impractical. The penalty was based on the appellant's refusal to pay duty for that day and contesting it, which was deemed unreasonable. The Tribunal found the penalty unjustified, emphasizing that an assessee has the right to contest issues without facing penalties solely for non-compliance with an officer's demand.In conclusion, the appeal was allowed, and the impugned order demanding duty and imposing a penalty was set aside by the Appellate Tribunal CEGAT, Mumbai.
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