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2016 (12) TMI 88 - CESTAT NEW DELHIDemand - short levy of duty due to claim of benefit in other notification - switchover from N/N. 6/2002-CE dated 01/3/2002 to N/N. 8/2003-CE dated 01/03/2003 and again switching over to N/N. 6/2002-CE dated 01/3/2002 - Held that: - it is to be seen that the appellants have been filing due ER-1 returns on regular basis specifically indicating Notification 6/2003-CE and also showing clearances without payment of duty on such clearances to the Department. Even if bonafide mistake on the part of the appellant could not be believed, the availment of such exemption has been duly notified to the Department in statutory returns. We find the justification for extended period demand as made out by the lower Authorities is not legally tenable. It was observed by the lower Authorities that the ER-1 return was not complete. It is not recorded which aspect of the return is incomplete. It is sufficient to note here that the appellants indicated description of the product, clearances without payment of duty and notification number for such clearances. In such situation, allegation of fraud, suppression etc. cannot be sustained against the appellant for confirmed demand for extended period. Regarding the appellants duty liability, we note that the duty for the normal period of demand is liable to be paid by the appellant as they have not paid any duty while claiming based exemption for clearance in a financial year. However, the appellant's contended that the duty liability should be calculated in terms of the general exemption N/N. 8/2003-CE as they are otherwise eligible for the same. We find force in the contention of the appellant. The demand for normal period has to be reworked after considering the exemption available under Notification 8/2003-CE. - We find that an exemption from duty, if otherwise available on fulfillment of all conditions cannot be denied on the ground that another exemption was wrongly availed by the appellant. In the facts and circumstances of the case, we find the duty liability of the appellant has to be reworked for the normal period after extending the concession under Notification 8/2003-CE. The penalty imposed under Section 11AC is not sustainable. Accordingly, the same is set aside. Penalty imposed under Rule 25 of Central Excise Rules, 2002 is reduced to ₹ 1,00,000/- - appeal disposed off.
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