MAHAVIR PLASTICS, Vs. THE COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M /s. Mahavir Plastics, a partnership firm, is the main appellant, who is aggrieved by demand of duty, penalty, etc. Shri. Upendra Shantilal Kapadia, a partner of the said firm, is aggrieved by the penalty imposed on him. M/s. Shrinath Enterprises is his proprietorship, which is also challenging the penalty imposed on it. In a show -cause notice dated 20/07/2000, the department asked M/s. Mahavir Plastics to show -cause to the jurisdictional Commissioner of Central Excise, as to why:

(2.) THE notice also proposed penalties on the other two appellants under Rule 209A of Central Excise Rules, 1944. It also proposed to confiscate certain quantity of cloth clips, which had been seized by the investigating officers of the department and subsequently released provisionally to the assessee (M/s. Mahavir Plastics) against bond and bank guarantee. The demand of duty and other proposals in the show -cause notice were contested. In adjudication of the dispute, ld. Commissioner of Central Excise confirmed the aforesaid demands of duty against M/s. Mahavir Plastics under the proviso to Section 11A(1) of the Central Excise Act, 1944 and imposed on them a penalty equal to the total amount of duty under Section 11AC of the Act. Interest on duty was demanded under Section 11AB of the Act. Penalties of Rs. 11.00 lakh each were imposed on M/s. Shrinath Enterprises and Shri Upendra Shantilal Kapadia under Rule 209A of the Central Excise Rules, 1944. Hence the present appeals.

(3.) IN respect of the goods mentioned at 'a' & 'b' above, the case of the assessee is that they were not liable to pay duty on these goods on account of the exemption available to them under Notifications No. 5/98 -CE dated 02/06/98 (Sl. No. 69) and 5/99 -CE dated 28/02/99 (Sl. No. 70). It is claimed that the relevant condition (Condition No. 10) was satisfied by the assessee for the benefit of exemption. Condition No. 10 ibid reads thus: "The manufacturer does not avail of credit of duty paid under Rule 57A or 57B on the products mentioned in column (2) or on any other product manufactured in the same factory". It is this condition for claiming the benefit of exemption under the aforesaid notifications, which is claimed to have been satisfied by the assessee. In support of this claim, ld. Counsel for the assessee has relied on a line of decisions of the Tribunal, listed below: