2007 (4) TMI 473 - AT - Central Excise

Summary

Issues involved: Whether the appellants are liable to pay interest on the confirmed duty demand and penal action for not maintaining separate inventory of raw material as required under Rule 57CC(9) of the Central Excise Rules, 1944.

Summary:
The appeal addressed the question of liability for interest and penalty in relation to a confirmed duty demand. The demand was based on the appellant's failure to maintain a separate inventory of raw material used in the exempted final product, as mandated by Rule 57CC(9) of the Central Excise Rules, 1944.

The appellants acknowledged the duty demand and had already paid it in the year 2000. They argued that they should not be held liable for interest and penalty because the duty was paid before the amendment to the rule, which allowed for a 30-day recovery period from the assent of the Finance Bill, 2005. They also cited the Explanation to Clause 82 of the Finance Bill, 2005, which stated that no act or omission would be punishable as an offence if it would not have been so punishable before the section came into force.

The learned S.D.R. supported the findings of the lower authorities regarding the liability for interest and penalty.

After considering the arguments, the Tribunal found merit in the appellant's plea based on the language of sub-clause 2(b) of Clause 82 of the Finance Bill, 2005, and the Explanation to Clause 82. Consequently, the Tribunal accepted the appellant's contention that they were not liable to pay interest or penalty, while upholding the duty demand.

Ultimately, the appeal was partly allowed, with the decision to set aside the interest and penalty while confirming the duty demand.