Tribunal dismisses duty refund appeal on biscuits, cancels penalty under Section 11AC, clarifies discount allowance.

The Tribunal dismissed Appeal No.E/185/2009 regarding the refund claim of duty on free supply of biscuits. In Appeal No.E/109/2010, the penalty under Section 11AC of the Central Excise Act, 1944, was set aside, based on the confusion surrounding the allowance of discount on goods sold under MRP. The Tribunal upheld the duty liability but eliminated the penalty under Section 11AC, relying on previous tribunal decisions for clarity on the discount issue.

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Issues:
1. Refund claim of duty on free supply of biscuits.
2. Imposition of penalty under Rule 5 of the Central Excise Rules, 2002.
3. Imposition of penalty under section 11AC of the Central Excise Act, 1944.
4. Allowance of discount on goods sold under MRP.

Analysis:
1. The appellants, manufacturers of biscuits, claimed a refund of duty paid on the free supply of biscuits offered under a 'Trade Load Offer.' The adjudicating authority rejected the refund claim citing assessability to duty under Section 4A of the Central Excise Act, 1944. The Commissioner (Appeals) upheld this decision, leading to Appeal No.E/185/2009.

2. A show cause notice was issued proposing a duty demand with interest and appropriation of the amount already paid. The original authority confirmed the demand and appropriation but imposed a penalty under Rule 5 of the Central Excise Rules, 2002. Both parties appealed, and the Commissioner (Appeals) upheld the duty liability, ordered penalty under section 11AC, and set aside the penalty under Rule 25. This resulted in Appeal No.E/109/2010.

3. During the hearing, the appellant did not contest the rejection of the refund claim or the duty demand. They sought relief from the penalty imposed under section 11AC, highlighting the confusion regarding the allowance of discount on goods sold under MRP. The Tribunal considered the matter settled by a previous decision and set aside the penalty under section 11AC.

4. The Tribunal dismissed Appeal No.E/185/2009 and partly allowed Appeal No.E/109/2010 by setting aside the penalty imposed under Section 11AC of the Central Excise Act, 1944. The decision was based on the clarification provided regarding the issue of discount on goods sold under MRP, as established by previous tribunal judgments.

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