Full Judgment
Commissioner (Appeals) that is the demand beyond six months is time barred. The second finding agitated by the Revenue is regarding levy of nominal penalty.
2. At the outset Shri S.K. Agarwal, Ld. Consultant submits that there has been delay and that there was no request for condonation of delay.
From the papers placed before us, we find that the impugned order was communicated on 18.6.9 whereas according to the record placed before us, appeal was filed on 17.6.99. The contention of the respondents was that the appellate authority and the other Commissioner were sitting in the same building and since the order was passed or 11.6.99, it could not reach another office after a gap of seven days and should have reached there early. On the copy of the order we find that there is stamp showing that the order was received on 17.6.99 in the office of the Additional Commissioner Even if, it was received on 17th June there will be a delay of one day. Ld. SDR makes a request that a nominal delay of one day may be condoned.
3. After careful consideration of facts of the case, we condone the delay in the instant case.
4. Ld. SDR submitted that the Government of India vide Notification No.87/91 exempted fruit pulp based drinks falling under sub-heading No.3202.90 of the Schedule to the Central Excise Tariff Act, 1985 with effect from 11.9.91. In the instant case, Ld. SDR submits that the appellants without trying to get any orders of the authorities regarding exemption of their product stopped paying duty and since the exemption was not applicable to the product manufactured by them, therefore nonpayment of duty without authorities giving any orders on the issue amounts to suppression and mis-statement and therefore Ld.
Commissioner (Appeals) has erred in holding that the demand was hit by limitation. He therefore submits that the impugned order may be set aside on this ground.
5. On the question of imposition of nominal penalty, Ld. SDR submits that the fact remains that the appellants stopped payment of duty on their own without waiting for any decision of the authorities which amounts to intention to evade payment of duty. He therefore submits that nominal penalty was not warranted in this case. In such a case deterrent penalty is essential. He therefore submits that higher penalty may be imposed on the respondents herein.
6. Shri S.K. Agarwal, Ld. Consultant submits that with the issue of Notification No. 87/91-CE, the appellants presumed that their product was covered by this exemption notification. However, to be on safer side, they wrote to the Department on 18.9.91 requesting them to provide guidance as to whether their unit will be exempted under that Notification. Ld. Consultant submitted that the Department was further reminded by the letter of the respondents dated 7.10.91 stating clearly that since their unit was exempted, therefore they will not pay duty nor will they maintain the records.
7. We have heard the rival submissions. For suppression, the Department has not been able to produce any positive evidence. On the contrary a finding that the respondent assessee had written to the Department clearly indicating that they were exempted by that Notification and were not required to pay duty. They had bonafidely sought guidance from the Department. Not only that they had further reminded the Department to guide them on the issue. Looking to these facts of the case, we find that there has been no suppression or mis-statement. In this view of the matter, we do not find any legal infirmity in the impugned order insofar as the limitation issue is concerned. We also note that after considering the facts of case, Ld. Commissioner (Appeals) sustained the imposition of penalty to the extent of Rs. 5,000 only. In the circumstances of the case, we find that this penalty is reasonable.
Thus on both the counts, Department has not been able to prove the case. In the circumstances, we uphold the impugned order in regard to limitation and imposition of penalty and reject the appeal to the above extent.