2008 (7) TMI 651 - AT - Central Excise

Tribunal upholds duty, cancels penalty on appeal due to Supreme Court ruling

SPICE SYSTEMS LTD. Versus COMMISSIONER OF CUSTOMS, C. EX., NOIDA

The Tribunal confirmed the duty demand of Rs. 1,91,690/- but set aside the penalty of Rs. 25,000/- imposed on the appellant. The appeal was disposed of ... Penalty Issues involved: Applicability of exemption Notification No. 5/98-C.E. (S.No. 69) and imposition of penalty.Applicability of exemption Notification: The appeal dealt with the dispute regarding the applicability of exemption Notification No. 5/98-C.E. (S.No. 69) to the products manufactured by the appellant. The appellant's advocate acknowledged that a similar issue was previously addressed in the case of Commissioner of Central Excise Delhi v. N.M. Nagpal (P) Ltd. The Tribunal's order dated 9-8-06, passed in compliance with the Supreme Court's directions, was unfavorable to the appellant. Consequently, the appellant did not contest the duty amounting to Rs. 1,91,690/- and the applicable interest. However, the appellant argued that there was no justification for imposing a penalty, as the issue primarily revolved around the legal interpretation of the notification's conditions, which had been conclusively settled by the Supreme Court.Imposition of penalty: After considering the submissions from both sides, the Tribunal accepted the advocate's argument that no penalty should be imposed in the given circumstances of the case. Consequently, the duty demand was confirmed as uncontested, but the penalty of Rs. 25,000/- imposed on the appellant was set aside.Conclusion: The appeal was disposed of with the confirmation of the duty demand and the setting aside of the penalty, as per the Tribunal's decision.