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2016 (11) TMI 863 - CESTAT AHMEDABADEligibility of exemption under N/N. 5/98-CE, dt.3.6.1998 - Air Mingled Polyester Yarn - Air Mingled Polyester Yarn were exempted prior to 01.03.1999 by virtue of Notification No.5/98-CE, dt.3.6.1998. However, the said product became remove from the exemption list w.e.f. 1.3.1999 - whether benefit of exemption will be available for the clearance of the goods during the period January 1999 to March 1999? - the Appellant did not dispute about the duty, but assailed the impugned order for imposing penalty equal to the duty confirmed - Held that: - The contention of the learned Advocate is that in absence of suppression, mis-declaration etc, penalty equal to duty cannot be imposed; also it is his contention is that due to the budgetary changes, immediately they could not come to know about the change of notification, and removal of the product manufactured by the Appellant from the list of exempted goods. In these circumstances, I am of the view that imposing penalty equal to the duty confirmed would be too harsh. However, it cannot be denied that there was violation of the provisions of the Central Excise Act and the Rules made thereunder while clearing the goods availing the exemption Notification. Therefore, imposing of nominal penalty would meet the ends of justice. Keeping in view the circumstances, in my opinion, imposition of penalty of ₹ 5,000/- would suffice the purpose. Accordingly, the penalty is reduced from ₹ 44,021/- to ₹ 5,000/- (Rupees Five Thousands only). On the issue of levy of interest, I find force in the contention of the learned Advocate, in view of the judgment of the tribunal National Fertilizers Ltd [2003 (11) TMI 397 - CESTAT, NEW DELHI]. Therefore, the interest confirmed under Section 11AB is set aside. Appeal allowed - decided partly in favor of appellant.
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