2000 (8) TMI 639 - AT - Central Excise

Tribunal reduces penalty, stresses duty payment accuracy for notification benefit.

INDIAN RAYON & INDUSTRIES LTD. Versus COMMR. OF C. EX., CALCUTTA-IV

The Tribunal remanded the case to the Asstt. Commissioner for further verification of duty payment particulars before extending the notification benefit. ... Exemption - Exemption - Issues:1. Interpretation of Notification No. 28/95 regarding duty payment on yarn for manufacturing cord.2. Effect of subsequent payment of duty on yarn on availing notification benefit.3. Consideration of circumstances leading to non-payment of duty on yarn.4. Verification of duty payment particulars for extending notification benefit.5. Imposition and reduction of penalty.Analysis:1. The case involved the interpretation of Notification No. 28/95, which required the cord to be made from yarn on which excise duty had been paid. The appellants had not paid duty on the yarn during a specific period due to unforeseen circumstances. The issue was whether subsequent payment of duty on the yarn could fulfill the notification's conditions.2. The Revenue argued that fulfilling conditions after manufacturing the cord did not entitle the appellants to the notification benefit. They contended that duty payment particulars could not be accurately linked to the yarn used in manufacturing the final product.3. The Tribunal considered the circumstances leading to the non-payment of duty on the yarn, acknowledging that the lapse was rectified by subsequent duty payment. They noted that the appellants had consistently paid duty on the yarn, except for the isolated instance in question.4. The Tribunal found that the Asstt. Commissioner had not accepted the subsequent duty payment, claiming it was for fresh issuance of yarn. However, the Tribunal observed that the duty payment particulars referenced earlier invoices, indicating it was not for fresh clearance. They remanded the matter to the Asstt. Commissioner for further verification of duty payment particulars before extending the notification benefit.5. Regarding the penalty imposed, the Tribunal acknowledged the lapse on the appellants' part but decided to reduce the penalty from Rs. 70,000 to Rs. 10,000, considering the circumstances and the reduction of penalty as a token measure despite allowing the notification benefit upon verification.In conclusion, the Tribunal analyzed the issues surrounding the interpretation of the notification, the effect of subsequent duty payment, the circumstances leading to non-payment, the verification of duty payment particulars, and the imposition and reduction of the penalty, providing a detailed and comprehensive judgment on each aspect of the case.