TMI Blog2009 (5) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... of these circumstances, following the Tribunal’s judgment in the case of CCE v. Sangrur Agro Ltd., I hold that no penalty is imposable on the Appellant under Section 11AC - E/1897/2005-SM - 442/2009-SM(BR)(PB), - Dated:- 13-5-2009 - Shri Rakesh Kumar, Member (T) REPRESENTED BY : Shri R.C. Choudhary, Advocate, for the Appellant. Shri S.K. Bhaskar, DR, for the Respondent. [Order]. - This appeal is being taken up for de novo decision in pursuance of order dated 25-9-08 of Hon'ble High Court in respect of reference Appeal No. 40/2008 by Commissioner of Central Excise, Gurgaon against Final Order No. 669/07-SM(BR), dated 28-3-07 passed by the Tribunal. The facts of the case in brief are as under : The Appellants are manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on clearances of 112735 kgs. of PVC tubing manufactured and captively consumed in the manufacture of medical disposable during the period from 1-3-2000 to 28-2-2002 along with interest on duty under Section 11AB, (b) an amount of Rs. 90,370/- payable along with interest in respect of clearances of exempted goods as per the provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2002 and since this amount had already been paid along with interest for appropriation of this amount, and (c) imposition of penalty on the Appellant under Section 11AC of Central Excise Act, 1944. The duty demand of Rs. 10,64,218/- in respect of clearances of PVC tubing for captive consumption and also the demand of Rs. 90,370/- in respect of clearances of exempted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd remanded this matter to the Tribunal for reconsidering the question of reduction of the penalty in the light of Hon'ble High Court's judgment in the case of CCE, Faridabad v. Illpea Paramount Pvt. Ltd., CEA No. 56 of 2005 decided on 21-7-2006 [2006 (204) E.L.T. 22 (P H)]. The observations of Hon'ble High Court in this regard are reproduced below : "On checking the record of the assessee, it was found that the assessee was not maintaining separate record in respect of inputs used in manufacture of exempted goods. After following due procedure, the penalty of Rs. 90,370/- was imposed. The order of penalty was upheld by the Appellant Authority but the Tribunal reduced the amount of Rs. 25,000/-. Ld. Counsel for the revenue submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in respect of inputs used in the manufacture of exempted finished products but still on their insistence, they paid an amount of Rs. 90,370/- alongwith interest; that there was no intention on the part of the Appellant to evade payment of amount as per the provisions of Rule 6(3)(b) of Cenvat Credit Rules, 2002 and in fact, according to the Appellant, no such amount was payable by them as they had not taken any Cenvat credit in respect of the inputs used in the manufacture of exempted goods and that in any case, no penalty is imposable on the Appellant under Section 11AC, as the provisions of Section 11AC are not applicable in respect of non-payment of the amount due as per the provisions of Rule 6(3)(b) and in this regard he places reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard had been not produced before the Commissioner (Appeals) and as such, they have not even disputed their liability to pay an amount equal to 8% of the value of the exempted finished products at the time of their clearances. It is only imposition of penalty under Section 11AC which has been disputed. According to the Deptt., they are liable for penalty equal to this amount as per the provisions of Section 11AC. The question now arises as to whether the provisions of Section 11AC are applicable at all for non-payment of the amount due under Rule 6(3)(b) of Cenvat Credit Rules. The Tribunal in the case of CCE v. Sangrur Agro Ltd. (supra) has held that the provisions of Section 11AC are not applicable in respect of short payment or non-p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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