Tribunal overturns penalty, upholds duty demand, directs duty quantification, and grants personal hearing.

The Tribunal set aside the penalty imposed by the Commissioner (Appeals) for valuation of captive consumption materials, finding no intention to evade duty and overturning the penalty while upholding the demand for differential duty. Regarding the remand of duty quantification, the Tribunal agreed with the revenue that the remand was impermissible post-amendment to the Central Excise Act, directing the Commissioner (Appeals) to determine the duty payable by the respondent after granting a personal hearing. The appeal and cross objection were disposed of accordingly.

---

---

Issues involved: Appeals against penalty imposed by Commissioner (Appeals) and remand of duty quantification by Commissioner (Appeals).

Appeals against penalty imposed by Commissioner (Appeals): The appellant had paid the differential duty and availed Modvat credit but challenged the penalty imposed by the Commissioner (Appeals) regarding the valuation of captive consumption materials. The Commissioner (Appeals) found no wilful act to evade duty and acknowledged the appellant's methodology based on costing norms. The Tribunal concurred that there was no intention to evade duty, citing the absence of mens rea and referring to relevant case law. The penalty was deemed unwarranted, following the principles laid down by the Supreme Court, and was set aside. The confirmation of the demand of differential duty was upheld, and the imposition of penalty was overturned.

Remand of duty quantification by Commissioner (Appeals): In this case, the Commissioner (Appeals) remanded the matter to the adjudicating authority for re-determination of duty demand on certain products. The revenue contended that the remand was not permissible after the amendment to Section 35A of the Central Excise Act, 1944, citing a Supreme Court decision. The Tribunal agreed with the revenue, setting aside the remand order and directing the Commissioner (Appeals) to determine the quantum of duty payable by the respondent, granting a personal hearing. The appeal and cross objection were disposed of accordingly.

---