1989 (8) TMI 204 - AT - Central Excise

Tribunal grants duty exemption on caustic soda, nullifies penalty imposition under Notification No. 113/74-C.E.

The Tribunal ruled in favor of the appellants, determining that they were entitled to duty exemption on the recovered caustic soda under Notification No. ... Exemption not effected because of existence of any intermediary Issues:- Duty liability on recovered caustic soda- Imposition of penaltyAnalysis:1. Duty Liability on Recovered Caustic Soda:- The appeal challenged an order demanding duty on recovered caustic soda and imposing a penalty. The appellants were involved in the recovery of caustic soda from spent caustic soda lye. The Superintendent of Central Excise found discrepancies in the factory records during a visit, leading to a show cause notice alleging violations of Central Excise Rules.- The appellants claimed eligibility for duty exemption under Notification No. 113/74-C.E., subject to certain conditions. They argued that ownership of the spent lye remained with the textile mill, and the intermediary firm involved did not acquire ownership of the goods. The appellants provided documentary evidence, including statements, affidavits, and delivery challans, supporting their contentions.- The evidence overwhelmingly supported the appellants' position that the intermediary firm acted as a conduit, and ownership of the spent lye remained with the textile mill. The conditions of the exemption notification were deemed to be fulfilled based on the evidence presented.- The Additional Collector's conclusions were deemed untenable as he incorrectly attributed ownership of the spent lye to the intermediary firm and failed to recognize the role of the textile mill in the process. The presence of an intermediary did not preclude eligibility for duty exemption, as long as the specified conditions were met.- The Tribunal concluded that the appellants were entitled to the benefit of duty exemption on the recovered caustic soda, as per Notification No. 113/74-C.E. The impugned order demanding duty and penalty was set aside, granting relief to the appellants.2. Imposition of Penalty:- The imposition of a penalty was based on the alleged violations of Central Excise Rules. However, since the Tribunal found in favor of the appellants regarding the duty liability on recovered caustic soda, the issue of penalty imposition became secondary and was not addressed separately in the judgment.- The Tribunal's decision to allow the appeal with consequential relief effectively nullified the penalty imposed along with the duty demand, as the primary issue of duty liability was resolved in favor of the appellants.This detailed analysis highlights the key arguments, evidence presented, and the Tribunal's reasoning leading to the decision to set aside the impugned order and grant relief to the appellants.