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M/s. S. Kumars Ltd. Versus CCE, Indore

2016 (3) TMI 130 - CESTAT NEW DELHI

Compounded Levy Scheme for textile in terms of Rule 96 ZNA of the Central Excise Rules - application for the scheme was rejected - penalty imposed on the appellant - Held that:- In the present case, the penalty equal to the duty is not legally sustainable. When the application of the appellant for the scheme was rejected, it is clear that the appellants were not governed by the provisions of the Scheme. Invoking one of the provisions of the Scheme for imposing penalty is thus legally not sustain .....

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2016 - SHRI S.K. MOHANTY, MEMBER (JUDICIAL) AND SHRI B. RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri B.L. Narsimhan, Advocate For the Respondent : Shri Sanjay Jain, DR ORDER PER B. RAVICHANDRAN: This appeal is directed against order dated 22.01.2007 of Commissioner (Appeals), Central Excise, Indore. 2. The brief facts of the case are that the appellants are independent textile processors. They have filed an application on 18.05.2001 to avail the newly introduced Compounded Levy Sch .....

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laimed as a refund and the same was granted to them. However, in June, 2006, the appellant were issued with a notice for imposition of penalty under Rule 25 read with para-9(5) (ii) of Notification no.32/2001-CE. The penalty was proposed on the ground that the appellant had paid duty belatedly during the period from November, 2001 to Feb., 2002. The notice was adjudicated and the Commissioner vide his impugned order imposed a penalty of ₹ 2,04,00,000/- on the appellant. Aggrieved by this, .....

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mmissioner, the amount already paid was adjusted against the normal duty liability in terms of Section 3 and they were granted refund of excess payment. The penalty imposed under sub-rule 5 (ii) of Rule 96 ZNC is not legally sustainable as they were not operating under the Compounded Levy Scheme. They were discharging duty on the provisional basis till the disposal of their application. He also relied on the decisions of this Tribunal in support of his contention. 4. Ld. AR reiterated the findin .....

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e beginning (1.5.2001), the appellant is out of the scheme. During the pendency of their application, the Rule permitted payment of duty in terms of Compounded Levy Scheme on a provisional basis, which upon final decision of the Commissioner will be adjusted against the actual dues to be determined. It is also admitted that by following provisionally Compounded Scheme, the appellant paid excess amount of duty than what is payable in terms of normal advalorem levy. When the scheme was not availab .....

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, it would be deemed to have been accepted from 1.5.2001. If, however, the application is rejected, the textile processor shall be liable to pay excise duty on the entire clearances from 1.5.20001 onwards as if the Compounded Levy was not applicable to him and the duty paid under the Compounded Levy shall be adjusted against his duty liability under advelorem levy. 7. Further, the Tribunal in Nav Bharat Udyog - 2004 (167) ELT 292 (Tribunal-Delhi) held that when the assessee has paid excess duty .....

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