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CCE, Chandigarh Versus Deepak Spinners Ltd.

2015 (11) TMI 667 - CESTAT NEW DELHI

Denial of exemption claim - Notification No.4/97-CE dated 01.03.1997 (Sl.No.113) and Notification No.5/99-CE dated 28.02.1999 (Sl.No.129) - Penalty u/s 11AC - Held that:- Goods were supplied to Punjab State Handloom Weavers Apex Cooperative Society which as its letter head shows, as Punjab Government Partnership Undertaking. Though the supplies at nil rate of duty to the cooperative society had been made against letters issued by Punjab State Handloom Weavers Apex Cooperative Society simply stat .....

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of the Tribunal (Final Order No.954/2011-EX dated 14.10.2011) holding that no malafide can be attributed to the respondent and hence the levy of interest under section 11AB and imposition of penalty under section 11 AC or Rule 173 Q (1) (d) would not be called for. - No merit in Revenue's appeal - Decided against Revenue. - Excise Appeal No.E/5000/2004-EX[DB] - FINAL ORDER NO. 51684/2015 - Dated:- 13-5-2015 - Mr. Rakesh Kumar, Member (Technical) And Mr. S.K. Mohanty, Member (Judicial) For the P .....

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ion in respect of yarn of polyester staple fiber containing cotton but not containing any other textile material and in which the proportion of polyester staple fiber is less than 70% by weight of total fiber content if the yarn is supplied to registered Apex Handloom Cooperative Society, National Handloom Development Corporation or State Handloom Development Corporation and the payment of the yarn supplied is made by cheque drawn by such cooperative society or corporation, as the case may be, o .....

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r, 1999, the respondent supplied quantity of certain spun yarn declared to be yarn of polyester staple fiber containing cotton but not containing any other textile material and in which the proportion of polyester stable fiber is less than 70% by weight of the total fiber content to the Punjab National Handloom Apex Cooperative Society Ltd., Chandigarh which is Punjab Government Partnership Undertaking. The respondent, however, had produced only a certificate issued by the above mentioned coo .....

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ative Society by Cheque drawn on its own Bank Account, the Apex Cooperative Society of the Govt. of Punjab had not used the duty free yarn supplied by the respondent for handloom, but the yarn had been illicitly diverted to the Power Loom Units. It is on this basis that the proceedings were initiated against the respondent for recovery of Central Excise duty of ₹ 8,02,691 under proviso to section 11A (1) of Central Excise Rules, 1944 and also interest on this duty under section 11AB and im .....

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,93,072/- already paid by the respondent prior to adjudication. There is no dispute that the balance amount of ₹ 9,620/- which the respondent had been ordered to pay forthwith by the Additional Commissioners order has also been paid. 2. The respondent filed an appeal before the Commissioner (Appeals) wherein they only challenged the imposition of penalty on them and also the levy of interest under section 11AB on the ground that during the period prior to May, 2001 the interest on duty un .....

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evade payment of duty. The appeal filed by the respondent was allowed by the Commissioner (Appeals) vide Order-in-Appeal dated 14.07.2004. Against this order of the Commissioner (Appeals) this appeal has been filed by the Revenue. The appeal filed by the Revenue was decided by the Tribunal by Final Order No.256/2009-EX dated 20th March, 2009 by which the Tribunal set aside the Commissioner (Appeal) s order on the point of penalty and interest and restored the lower authoritys order dated 16.01 .....

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fore the Tribunal on 08.04.2015 and the Tribunal was directed to decide this appeal in accordance with the law within a period of two months thereafter. Accordingly, on 08.04.2015, when the respondent appeared before the Tribunal with the High Courts order the matter was directed to be listed for final hearing today. 4. Heard both the sides. 5. Shri M.S. Negi, the ld. DR assailed the impugned order by reiterating the grounds of appeal and pointed out that as mentioned in the Tribunals final ord .....

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tive Society mentioning that the Society is exempt from excise duty. Shri Negi, therefore, pleaded that there was deliberate contravention of the Rules with intent to evade payment of duty and hence interest on duty under section 11AB was chargeable and penalty has been correctly imposed on the respondent under section 11 AC. 5. Shri R.K. Khanna, Chartered Accountant, the ld. Counsel for the respondent, pleaded that while the respondent are not contesting the duty demand, they are contesting the .....

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nits and would not be supplied to the handloom units more so, when the payment for the yarn supplied had been received by them from Punjab State Handloom Weavers Apex Co-operative Society by Cheque drawn on its own Bank Account, that difference in the composition of Polyester Fiber is only in respect of one consignment valued at ₹ 2,13,000/- as against the total goods valued at about ₹ 43,00,000/- supplied by the respondent to the Cooperative Society and, therefore, merely on the bas .....

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ibunal is squarely applicable to the facts of this case and that in view of the above, there is no infirmity in the impugned order. 6. We have considered the submissions from both the sides and perused the records. The respondent during the period of dispute, that is, during the period from January 1998 to December, 1999 had supplied polyester cotton blended yarn to Punjab State Handloom Weavers Apex Co-operative Society at nil rate of duty under Notification No.4/97-CE and 5/99-CE. These exempt .....

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