2010 (6) TMI 197 - AT - Central Excise

Tribunal Grants Stay, Orders Final Disposal

AMAN MEDICAL PRODUCTS (P) LTD. Versus COMMISSIONER OF C. EX., DAMAN

AMAN MEDICAL PRODUCTS (P) LTD. Versus COMMISSIONER OF C. EX., DAMAN - 2010 (257) E.L.T. 111 (Tri. - Ahmd.) Issues:1. Dispensation of penalty sought by the appellant.2. Demand of duty on parts in accordance with Rule 6 of Modvat Rules.3. Imposition of penalty under Rule 6(b)(ii) and Rule 15 of Cenvat Credit Rules.4. Applicability of Rule 6(b)(ii) to the entire period in question.5. Scope of proceedings and imposition of penalty under different rules.Analysis:Issue 1: Dispensation of penalty sought by the appellantThe appellant sought dispensation of penalties amounting to Rs. 4,86,979/- and Rs. 1,03,699/-. The penalties were related to the clearance of syringes and parts thereof, where the appellant had availed Modvat credit for duty paid on inputs used in manufacturing. The appellant cleared both syringes and parts by debiting duty through PLA.Issue 2: Demand of duty on parts in accordance with Rule 6 of Modvat RulesProceedings were initiated against the appellant to confirm the demand of duty on parts at 10% of their value under Rule 6, alleging the use of modivatable inputs in manufacturing both dutiable and exempted products. The Original Adjudicating Authority confirmed the demand and imposed penalties, which were challenged in appeal.Issue 3: Imposition of penalty under Rule 6(b)(ii) and Rule 15 of Cenvat Credit RulesThe Commissioner (Appeals) set aside the duty confirmation but upheld the penalty under Rule 6(b)(ii) based on the issuance of excise invoices for exempted syringe parts. The appellant argued that the rule was introduced after the relevant period and was not invoked earlier, questioning the imposition of penalties under Rule 15 of Cenvat Credit Rules.Issue 4: Applicability of Rule 6(b)(ii) to the entire period in questionThe appellant contested the applicability of Rule 6(b)(ii) to the entire period from 2004 to March 2008, stating that the rule came into effect later. The learned advocate argued against the retrospective application of the rule and challenged the penalty imposition based on this rule during the appeal process.Issue 5: Scope of proceedings and imposition of penalty under different rulesThe Tribunal noted that the show cause notice and adjudication order invoked penalties under Rule 15, which operates in a different area compared to Rule 6(b)(ii). Rule 6(b)(ii) was introduced for the first time by the Commissioner (Appeals) in the impugned order, expanding the scope of proceedings at the appeal stage. The Tribunal found that the appellant had a prima facie case in its favor, allowing the stay petition unconditionally and ordering the appeal for final disposal on a specific date.This detailed analysis of the judgment highlights the issues involved and the arguments presented by the parties, providing a comprehensive overview of the legal reasoning and decisions made by the Tribunal.