Hot rolled Patta Patti under Chapter 72201290 qualifies for duty exemption under Notification 12/2012 Sr. No. 203

CESTAT Ahmedabad allowed the appeal, holding that hot rolled Patta Patti falling under Chapter 72201290 was eligible for exemption under Notification No. 12/2012 Sr. No. 203, as hot rolling occurs prior to cold rolling process. The tribunal relied on CBEC clarification dated 07.12.2015 confirming all processes before cold rolling stage qualify for duty exemption. Regarding penalty imposition on firm's partner, CESTAT ruled separate penalty cannot be imposed on partners when case exists against partnership firm, citing Gujarat HC precedent in Pravin N. Shah case, as this constitutes double jeopardy. Excise duty demand was set aside.

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Issues:
1. Eligibility of exemption under Notification No. 03/2005 for hot rolled Patta Patti.
2. Imposition of penalty on the partner of the firm.

Analysis:
Issue 1:
The case involved the appellants engaged in manufacturing SS Hot Rolled Patta Pattii and SS Cold Rolled Patta Patti, claiming exemption under Notification No. 03/2005 for hot rolled Patta Patti. The dispute centered around whether the benefit of exemption applied to hot rolled Patta Patti without undergoing cold rolling. The Adjudicating Authority confirmed the demand for Central Excise duty, interest, and penalty, invoking a larger period of limitation. The appellants contended that the hot rolled Patta Patti did not undergo cold rolling and thus qualified for the exemption. They cited a board circular and legal precedents to support their claim. The Revenue reiterated the findings of the impugned order.

Upon careful consideration, the Tribunal analyzed the relevant exemption Notification No. 12/2012, specifically Sr. No. 203, which exempted pattis and pattas not subjected to cold rolling. The Tribunal referred to a clarification indicating that all processes before cold rolling were eligible for exemption. As the hot rolled Patta Patti did not undergo cold rolling, the Tribunal concluded that the appellants were entitled to the exemption. Additionally, the Tribunal noted that separate penalty on the partner of the firm could not be imposed, especially when the firm was eligible for the exemption notification, thereby rejecting the demand for excise duty.

Issue 2:
Regarding the penalty on the partner, the Tribunal concurred with the appellant's argument that imposing a separate penalty on the partner of a partnership firm would amount to double jeopardy. Citing legal precedents, including a decision by the Hon'ble Gujarat High Court, the Tribunal emphasized that since the appellant firm qualified for the exemption notification, penalizing the partner was unwarranted. Consequently, the Tribunal set aside the impugned orders, allowing the appeals with any consequential relief as per the law.

In conclusion, the Tribunal ruled in favor of the appellants, holding them legally eligible for the exemption under Notification No. 12/2012-CE (203) for hot rolled Patta Patti and dismissing the demand for excise duty. The judgment was pronounced in open court on 11.10.2023.

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