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2019 (7) TMI 1819 - CESTAT KOLKATAWrongful availment of exemption N/N. 3/204-CE dated 08.01.2004 - non-nclusion of element of cost of transportation including average freight - inclusion of Irrecoverable taxes on average/equalized basis - HELD THAT:- The appellant inter alia manufactured and cleared paints and varnishes classifiable under chapter 32 to M/s.Driplex Water Engineering Limited without payment of duty and claiming exemption under Notification No.3/2004-CE dated 08.01.2004. In order to claim such exemption, the appellant was required to furnish a certificate issued by the Collector/Deputy Commissioner/Dist.Magistrate of the district in charge of the project to the effect that the goods were cleared for the purposes specified in the said notification. It is the case of the appellant that the fact of exemption was duly disclosed in Form ER-1 returns and hence there was no suppression or willful misstatement on the part of the appellant. Further the exemption was availed on the strength of a certificate issued by the District Collector duly approved by the state Government - the appellant availed the benefit of the said notification with mala fide intention of evasion of payment of duty by resorting to suppression of facts or willful misstatement is not sustainable. It is at most a case of mistake in the proper and strict interpretation of an exemption notification and definitely not a case of fraudulent availment of notification by resorting to suppression of facts, willful misstatement, commissioning of fraud with mala fide motive of evasion of duty - there are no ingredient of misstatement, suppression of facts, with intent to evade payment of duty. Accordingly the penalty imposed cannot be sustained and the same is set aside. Appeal allowed - decided in favor of appellant.
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