Tribunal upholds duty demand but cancels penalty under Rule 173Q.

The tribunal upheld the duty demand against the appellant for short payment but set aside the penalty imposed under Rule 173Q of the Central Excise Rules, 1944. The appellant's argument of lack of intent to evade duty payment was accepted, leading to the penalty being overturned. The tribunal ruled in favor of the appellant, partially allowing the appeal by modifying the orders to require payment of duty with interest but canceling the penalty.

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Issues:
- Appeal against rejection of appeal by Commissioner (Appeals)
- Applicability of duty rates under Notifications 9/2000-CE and 47/2000-CE
- Communication of amended Notification to the appellant
- Short payment of duty and subsequent show-cause notice
- Imposition of penalty under Rule 173Q of Central Excise Rules, 1944

Analysis:
1. The appeal was filed against the rejection of the appeal by the Commissioner (Appeals) regarding the duty rates applicable to the appellant under Notifications 9/2000-CE and 47/2000-CE. The appellant, a manufacturer of stone crusher machine and parts, availed exemption benefits subject to certain duty rates based on the value of clearances.

2. The appellant crossed the initial clearance limit of Rs. 50 lakhs and started paying duty at the higher rate of 12.8%. Subsequently, the limit was raised to Rs. 100 lakhs under Notification 47/2000-CE. However, the appellant claimed they were unaware of this change until it was communicated to them after issuing invoices at the higher rate, resulting in a short payment of duty amounting to Rs. 83,645.

3. The appellant argued that they debited the duty amount actually payable and did not collect the excess duty from buyers. They contended that there was no intent to evade duty payment, willful misstatement, suppression of facts, or fraud on their part. Citing relevant case laws, the appellant challenged the imposition of penalty under Rule 173Q of the Central Excise Rules, 1944.

4. The Revenue supported the lower appellate authority's findings, emphasizing the duty rate mentioned in the appellant's invoices to customers as the basis for requiring the appellant to pay the duty under Section 11D of the Central Excise Act, 1944. They relied on a tribunal decision to support their stance.

5. After hearing both sides, the tribunal agreed with the Revenue that the appellant, by mentioning the higher duty rate in their invoices, was liable to pay the duty under Section 11D. However, the tribunal found no grounds for imposing a penalty due to the absence of willful misstatement, suppression of facts, or fraud by the appellant. Consequently, the penalty imposed was set aside.

6. The tribunal modified the impugned orders by upholding the demand for duty along with interest while setting aside the penalty. The appeal was partly allowed in favor of the appellant based on the above considerations.

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