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of <h1>Manufacturing units merged, duty reduced, penalties nullified.</h1> <h3>Parag Fan And Cooling Systems Ltd. Versus C.C.E.</h3> The tribunal held that two units were not entitled to separate small scale exemptions as they were considered one manufacturer. The duty liability ... - Issues:1. Whether two units are entitled to separate small scale exemption.2. Computation error in duty liability.3. Validity of penalties imposed.Analysis:1. The appeals addressed the dispute regarding the eligibility of two units, Parag Fan & Cooling Systems Ltd. and Parag Industries, for separate small scale exemptions. The investigation revealed that both units are considered as one manufacturer, thus not entitled to individual exemptions. The tribunal upheld this finding, emphasizing the detailed factual justification provided in the impugned Order. Consequently, demands were made against the units due to the ineligibility for separate exemptions.2. A significant aspect of the judgment focused on a computation error in duty liability. The appellant's counsel highlighted a flaw in the computation, specifically related to exempted clearances made to IIT. Referring to Notification No. 7/97, it was pointed out that clearances exempt from excise duty under any other notification should not be considered for determining the aggregate value of clearances. Consequently, the tribunal acknowledged the error in the computation made by the Revenue and reduced the duty demand from Rs. 2,21,672 to Rs. 1,82,672.3. The judgment also addressed the validity of penalties imposed on the appellants. The appellant's counsel argued that the penalties were unwarranted, citing a judgment of the Hon'ble Apex Court in the case of Armit Foods 2005 (190) ELT 433. It was contended that a penalty imposed under Rule 173Q without specifying the sub-rule violated is not sustainable. The tribunal accepted this submission, noting that the impugned order did not mention the specific sub-rule relied upon. Consequently, the penalties imposed were set aside, and the appeals were partly allowed by reducing the duty amount and nullifying the penalties.
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