2008 (1) TMI 670

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....e impugned order. After hearing parties on the stay application, requirement of pre-deposit is waived and the appeal is taken up. 2. The facts of the case are that during December' 01 to February' 02, the appellants had cleared Viscose Staple Fibre yarn availing exemption under Notification No. 3/2001 dated 1-3-2001. The only condition for availing the above exemption was that the assessee did not take credit of duty paid on the inputs. While making the impugned clearances, the assessee collected an amount equivalent to the credit relatable to inputs contained in the finished products from the buyers. In April '02, the appellants returned the excess amounts collected as excise duty to its customers by raising credit notes in favour ....

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....rds the rival submissions. The appellants returned the excess amounts collected from its buyers in April 2002 itself whereas, the show cause notice was issued in May 2005. As there is no evasion of duty involving suppression of facts, collusion or fraud, the penalty imposed under Section 11AC is not sustainable. In the Sangam Processors (Bhilwara) Ltd. (supra), the Tribunal had dealt with a claim for refund of duty filed in 1986 and where the claimants had returned the amounts of duty by issuing credit notes on 26-12-1988. The Tribunal observed that the duty incidence passed on could not be remedied by issue of credit notes to customers. 5.1 The Tribunal made following observations in Sangam Processors v. CCE , Jaipur - 1994 (71) E.....