SPECIALITY COATINGS AND Vs. C.C.E.

JUDGEMENT

(1.) THE case is before us on remand by the Hon'ble High Court of Punjab and Haryana, Chandigarh. That order may be read as under: In view of judgment rendered, today, in C.E.A. No. 13 of 2005 (Commissioner of Central Excise, Delhi -111 v. Machine Montell (1) Ltd. and Anr.), we allow this appeal and set aside the order passed by the Tribunal to the extent and penalty levied on the assessee have been set aside because the duty was deposited before issue of show cause notice and remand the case back to the Tribunal for fresh decision on merits and in accordance with law. Parties are directed to appear before the Tribunal for further proceedings on 4.9.06.

(2.) WE have perused the records and heard both sides. The only issue for consideration is whether penalty is attracted in the present case under Section 11AC of the Central Excise Act. That section also may be read: Section 11AC - Penalty for short levy or non -levy of duty in certain cases - where any duty of excise has not been levied or paid or has been short -levied or short -paid or erroneously refunded by reasons of fraud, collusion or any willful mis -statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under Sub -section (2) of Section 11A, shall also be liable to pay a penalty equal to the duty so determined: Provided that where such duty as determined under Sub -section (2) of Section 11 A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty five per cent of the duty so determined: Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty as reduced or increased, as the case may be, shall be taken into account: Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty five percent of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation - For the removal of doubts, it is hereby declared that -

(3.) THE appellant is a manufacturer of coated paper. Paper is the main input for the manufacture. That input is procured from paper mills who are engaged in the manufacture of paper. Paper consignments come in huge reels. The appellant is entitled to take credit of (Modvat) duty paid on the paper by the manufacturer of paper. This credit can also be taken upon receipt of input. The appellant was, therefore, taking credit applicable to each consignment at the time of receipt of the consignment.