2006 (7) TMI 114 - HC - Central Excise

Tribunal Decision Upheld on Duty Demand Dispute

The High Court upheld the Tribunal's decision to set aside the demand of duty and penalties imposed on the assessee for contravening provisions of a ... Second hand cold rolling machine, purchased by the assessee couldn’t have started regular production prior to 1.7.2002 and the appellant has already paid tax in ordinary manner upto July, 2002 - From Aug., 2002, he has been permitted to avail special procedure for payment of duty instead of normal mode – so the demand after taking into consideration second machine’s production prior to 1st July, 2002 is not sustainable - Demand raised by the Asst. Collector & confirmed by the CCE are set-aside Issues:Whether the Tribunal was correct in setting aside the demand of duty and penalties imposed on the assessee for contravening provisions of a notification regarding a special compounded levy scheme.Analysis:The case involved a manufacturer of Steel Rods who had purchased a second-hand machine in February 2002. Revenue officers found both machines working during a visit in July 2002. The assessee claimed permission to avail a special procedure for payment of duty from August 2002, which was granted by the Commissioner, Central Excise. The Tribunal found that the second-hand machine could not have started production before July 2002, and the appellant had already paid tax in the ordinary manner until then. As the demand for duty was not sustainable considering the timeline of the second machine's production, the Tribunal set aside the demand imposed by the Assistant Collector and confirmed by the Commissioner, Central Excise.The High Court, comprising Rajesh Balia and Gopal Krishan Vyas JJ., noted that the Tribunal's findings were factual and did not raise a question of law. Therefore, the Court concluded that the appeal failed and dismissed it accordingly.