TMI Blog2005 (6) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts without payment of duty, claiming the benefit of exemption under a Notification. This was objected to by the department, who classified the goods under S.H 5911.90 and demanded duty accordingly. The Show cause notice dated 5-4-2002, which raised this demand, also proposed penalty on the appellants. Though this notice was contested, the party accepted the department s view on classification and accordingly paid duty on the goods for the above period during the course of adjudication of the notice. The only issue before the adjudicating authority was whether the assessee was liable to be penalised under Rules 25 and 27 of the Central Excise (No. 2) Rules, 2001. The authority answered this question in the affirmative and imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on duty is not leviable from the assessee in the above circumstances. The appellants had no intent to evade payment of duty at any point of time. Hence the penalty provisions were not invocable against them. Ld. DR reiterates the findings of the lower appellate authority and submits that misdeclaration is covered by the expression misstatement occurring in Section 11AB of the Central Excise Act which provides for levy of interest on duty, non-paid, non-levied, short-paid, short-levied etc. According to the ld. DR, the acceptance, by the appellants, of the department s classification of the goods amounted admission of misdeclaration of the goods and consequently the demand for interest under Section 11AB is justifiable. Ld. DR has adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts for Modvat purpose under the relevant rule, nor do they have a case that the yarns used in the manufacture of the said products were not specified inputs. Payment of duty on the final products by the assessee is also not in dispute. In the circumstances, it will not be justifiable to deny them the benefit of input duty credit. The lower authorities have denied the benefit to the assessee on the ground that they were not registered with the Central Excise department and did not follow the statutory procedure during the material period. I am told that the assessee is now registered with the Department and are following the procedure. In the circumstances, they can legitimately claim the benefit of Modvat credit on the yarns used in the man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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