COMMISSIONER OF CENTRAL EXCISE Vs. CROMPTON GREAVES LTD

JUDGEMENT

(1.) This appeal is filed by the revenue challenging the order passed by the Customs, Excise and Service Tax Appellate Tribunal allowing the appeal filed by the assessee and granting him the relief in the matter of payment of Central Exise duty.

(2.) Tire assessee is a manufacturer of Rural Automotive exchanges and parts thereof. They cleared 900 numbers of FRS 20 with all accessories to M/s. Midas Communication Technologies Private Limited, C hernial a 100% EOU on payment of Central Excise Duty of Rs.5,96,304.00 on 31.1.2004. The customer rejected the goods on account of certain defects. The goods were brought, back to the factory of the assessee on 27.2.2004 and 12.3.2004. The assessee availed Cenvat credit of Rs. 5,96,304.00 on. 25.3.2004. After rectifying the defects in the goods, on the basis of a. fresh purchase order, this time cleared the goods free of duty under cover CT-3 certificates. The revenue issued a show cause notice dated 1.0.8.2005 to the assessee for clearing the goods without payment of duty. Duty was demanded under Rule 16 of the Central Excise Rules, 2002. The adjudicating authority by his order dated 20.3.2006 affirmed the duty demand and imposed penalty under Rule 25 of the Rules and Section. 11.A.C of the Act. The appeal preferred by the assessee came to be dismissed. Against the said order they preferred an appeal to the Tribunal. The Tribunal held in the first instance the assessee was not liable to pay any excise -.duty at. all as the goods cleared to 1.00% EOU are exempted from payment of Central Excise vide notification dated 22/2003. By mistake the assessee had paid, the said duty. When xhe goods were returned as defective, they were justified in claiming return of the duty paid. However, after rectifying the delects, in. pursuance of a fresh, purchase order, when they supplied the goods again to the very same 1.00% EOU when by that time they had obtained CT3 certificates there wac no liability on. their part to pay any duty at all. Therefore, they committed no illegality in clearing the goods without paying duty. Therefore, they allowed the appeal, set aside the orders passed by the authorities below. It is against, the said order, the revenue is before this Court.

(3.) Learned counsel appearing for the revenue contended that, the assessee was under an obligation, to comply with the requirement of Rule 16(3} vvhich admittedly they have not done. Even the Tribunal holds thai, the assessee committed, a lapse in not complying with the said legal requirement. In those circumstances, the Tribunal was not justified in interfering with the orders passed by the Commissioner of Appeals as well as the assessing officer and, therefore, he submits a case for interference is made out.