2009 (5) TMI 104

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.... facts of the case in brief are as under : The Appellants are manufacturer of Medical Disposables falling under heading 90.18 of the Tariff, Some of which are fully exempt from duty under Notification No. 7/2000-C.E., dated 1-3-2000. The Appellant, for manufacture of medical disposables start from PVC resin which is first converted into PVC compound and thereafter extruded Tubing in running length, which, in turn, is used for manufacture of medical disposables like Nebulizer Kit, Endotracheal Tube etc. The Appellant take Cenvat credit of duty paid on PVC resin and other inputs. On 27-5-03, the jurisdictional Central Excise Officers visited the Appellant's factory and checked their central excise records. One of their objections was that ....

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....and also the demand of Rs. 90,370/- in respect of clearances of exempted medical finished goods under Rule 6(3)(b) of Cenvat Credit Rules had been made by invoking extended period under proviso to Section 11A(1) of Central Excise Act alleging that the Appellant had suppressed the relevant information. The Addl. Commissioner vide Order-in-Original dated 8-10-04 dropped the duty demand in respect of clearances of PVC tubing for captive consumption but confirmed the demand of Rs. 90,370/- alongwith interest in respect of clearances of exempted finished goods under Rule 6(3)(b) of Cenvat Credit Rules, 2002 and besides this, imposed penalty of equal amount i.e. Rs. 90,370/- on the Appellant under Section 11AC of Central Excise Act. On appeal ....

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....ced the amount of Rs. 25,000/-. Ld. Counsel for the revenue submits that mere deposit of the amount was not enough to infer that penalty was not called for under Section 11AC of the Act in view of a Division Bench judgment of this Court in CCE, Delhi-III v. Machino Montell (I) Ltd. 2006 (202) E.L.T..398 (P&H). The issue of penalty has to be examined as per the statutory provisions of Section 11AC which has not been done in the impugned order. It is also pointed out that this Court in CCE, Faridabad v. M/s. Illpea Paramount Pvt. Ltd. CEA No. 56 of 2005 decided on 21-7-06, held that if a case for imposing penalty is made out, the amount of penalty prescribed under the statutory provision was the minimum. In view of the above, we are ....

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....amount due as per the provisions of Rule 6(3)(b) and in this regard he places reliance on the Tribunal's judgment in the case of CCE v. Sangrur Agro Ltd. reported in 2006 (202) E.L.T. 835. 2.2 Shri S.K. Bhaskar, Ld. DR pleaded that since the Appellant had taken Cenvat credit in respect of inputs used in the manufacture of dutiable as well as exempted finished product and had not maintained separate account and separate inventory of the inputs intended, they were liable to pay an amount equal to 8% of the value of the finished products at the time of their clearances; that since the Appellant had suppressed the information in this regard from the Deptt., the Commissioner (Appeals) has rightly upheld the penalty imposed on them under Secti....