2010 (2) TMI 472

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.... of yarn and the same was exempted from duty prior to 1-4-2003. The factory premise of the assessee was inspected and it (assessee) was found manufacturing the goods without obtaining the Central Excise Registration and cleared the same without payment of duty. Therefore, a show cause notice dated 7-5-2004 (Annexure A1) was issued to the assessee, as to why the amount of duty be not recovered alongwith interest and penalty be not imposed for various contravention of the Central Excise Act, 1944 (for short "the Act") and Central Excise Rules, 2002 (hereinafter to be referred as "the Rules"). 2. In the wake of show cause notice, the assessee filed the reply, explaining that the process of doubling of yarn was exempted from duty prior to&nbsp....

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....ll subject to the verification by jurisdictional excise authorities as discussed above; (iii)       The penalty is reduced Rs. 25,000/- (Rupees Twenty Five Thousand only) under Section 11AC of the Act; (iv)       Penalty imposed under Rule 25 of the Rules is set aside; (v)        Interest shall also be recoverable under Section 11AB of the Act as per rates applicable." 5. Dissatisfied with the order of Commissioner (Appeals) (Annexure A3), the revenue filed the appeal. The Customs, Excise and Service Tax Appellate Tribunal further modified the order (Annexure A3) and enhanced the penalty from Rs. 25000/- to 50,000/-, vide impugned order dated ....

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....tly confirmed the demand of duty and imposed the penalties and interest. Hence, he prayed for acceptance of the appeal. 9. Supporting the impugned order, on the other hand, learned counsel for the assessee has urged that since everything was made clear to the authorities and the indicated goods were exempted from duty prior to 1-4-2003, so, the assessee is not liable to pay any penal duty and interest in this regard and rather Tribunal has enhanced the penalty, so no interference is called for in this respect. 10. Having heard the learned counsel for the parties and having gone through the record, we are of the considered view that no ground for interference in the impugned order is made out. 11. It is not a matter of dispute that the as....