2000 (4) TMI 681 - AT - Central Excise

Summary

Issues:
- Duty confirmation against the appellants for not obtaining Central Excise Registration and not paying duty on clearances during the financial year 1994-95.
- Dispute regarding the benefit of Notification No. 1/93 for nil rate of duty and concessional rate of duty on clearances.
- Calculation of duty based on entire clearance figures without extending the benefit of the exemption notification.

Analysis:

The judgment by the Appellate Tribunal CEGAT, Kolkata involves the confirmation of duty against the appellants for their failure to obtain Central Excise Registration and pay duty on clearances during the financial year 1994-95. The Revenue based the duty confirmation on the total clearance value taken from the declaration filed by the appellants with the Central Excise Authorities. The appellants argued that they believed they were entitled to the nil exemption under Notification No. 1/93 for the first clearance of Rs. 30.00 lakhs, and thus did not follow Central Excise formalities. The Tribunal noted that the duty proposed in the show cause notice was confirmed without extending the benefit of the said notification, and the orders of the Assistant Commissioner and Commissioner (Appeals) did not provide valid reasons for this denial.

Regarding the dispute over the benefit of Notification No. 1/93, the appellants contended that they were legally entitled to the nil rate of duty for the first clearance of Rs. 30.00 lakhs and a concessional rate of duty for subsequent clearances. The Tribunal observed that the authorities failed to justify the denial of the notification's benefit solely based on the appellants' non-compliance with record maintenance and Central Excise formalities. It was emphasized that even in cases of clandestine removal, duty calculation should incorporate any applicable exemption notification. The Department and the appellants agreed on the clearance figures, with the dispute focusing on the duty calculation methodology.

The Tribunal agreed with the appellants' argument that duty should be recalculated after granting the benefit of Notification No. 1/93 for the initial clearance and applying the concessional rate for subsequent clearances. Additionally, the Tribunal clarified that the job work undertaken by the appellants should be treated as their own manufacture and clearances according to the law. As a result, the Tribunal directed the Assistant Commissioner to reexamine the case, providing the appellants with a chance for a personal hearing. Consequently, the appeal was allowed by remand, emphasizing the need for a fresh decision considering the benefit of the exemption notification and concessional duty rates.