2008 (7) TMI 655 - AT - Central Excise

Summary

Issues involved: Central excise duty demand under Notification No. 30/2004-C.E. for goods cleared without payment of duty, maintenance of separate records for inputs used, benefit of exemption under Notification No. 30/2004-C.E., compliance with Board's Circular No. 795/28/2004-CX.

Summary:

The Appellate Tribunal CESTAT, Ahmedabad addressed the issue of a central excise duty demand of Rs. 24,884/- for goods cleared without payment of duty under Notification No. 30/2004-C.E. The Commissioner (Appeals) confirmed the demand against the appellant for availing benefits under Notifications No. 29/2004-C.E. and No. 30/2004-C.E. simultaneously without maintaining separate records of inputs used. The Original Adjudicating Authority found that the appellant had maintained a separate production register for the goods manufactured and cleared, meeting the conditions of Board's Circular No. 795/28/2004-CX. However, on appeal by the Revenue, the Commissioner (Appeals) reversed the decision, imposed penalties, and demanded interest.

Upon hearing both sides, the Tribunal noted that the Original Adjudicating Authority had verified the maintenance of a separate production register for exempted goods, as required by the Board's circular. The Commissioner (Appeals) observed discrepancies in the appellant's records regarding the use of duty-paid yarn in the manufacture of dutiable and exempted goods, leading to the denial of exemption benefits under Notification No. 30/2004-C.E. The Tribunal found the Commissioner's conclusions to be based on assumptions rather than evidence examination, and reinstated the Original Adjudicating Authority's logical decision, granting relief to the appellants.

The Tribunal's decision emphasized the importance of maintaining separate records for dutiable and exempted goods, as per the conditions of the relevant notifications and circulars. The appeal was allowed, and the stay petition was disposed of accordingly.