MOHAN GENERATOR AND PUMPS P. LTD. Vs. CCE

JUDGEMENT

(1.) THE appellant challenges the order of the Commissioner (Appeals) dated 28.2.2005 upholding the order -in -original confirming the demand of duty of a total amount of Rs. 3,29,078/ - under Section 11A of the Central Excise Act, 1944 and imposing penalty of Rs. 2,50,000/ - under Rules 9(2), 52A and 173Q of Central Excise Rules of 1944 and ordering payment of interest under Section 11AB of the Act.

(2.) THE appellant was registered as a manufacturer of diesel generating sets falling under sub -headings 8502.90, 8501 and 8408 of the Tariff Act. According to the Revenue, the appellant was availing exemption under the Notification No. 9/99 -CE dated 28.2.99 and was availing the facility upto 26.4.199. As per the conditions incorporated in the notification an assessee availing the benefit thereunder could not opt out of the facility in the remaining part of the financial year, for availing the benefit of the Notification No. 8/99 -CE dated 28.2.99. It was alleged that the appellant had filed a declaration under Rule 173B with effect from 1.4.1999 by their letter dated 3.4.1999 stating that they had opted for the exemption under the Notification No. 9/99 upto 26.7.1999. The clearances were made at a concessional rate of 60% of the normal rate of duty with a facility of availing modvat credit under Rule 57A. During the period from 1.4.1999 to 26.4.1999, the appellant effected clearances of its product of the value of 5,01,519/ - and paid duty amount of Rs. 9,410/ - from its personal ledger account and Rs. 38,737/ - from RG.23A Part II account, that is, by utilizing modvat credit. However, thereafter the appellant claimed exemption under the Notification No. 8/99 dated 2.8.1999 and filed a declaration under Rule 173B with effect from 27.4.1999, claiming full exemption for first aggregate clearance of Rs. 50,00,000/ - under that notification. According to the appellant, since they had not exercised option under Notification No. 9/99, but had exercised their option only with effect from 27.4.1999 to avail exemption under the Notification No. 8/99, the benefit of the Notification No. 8/99 could not be denied to the appellant.

(3.) IT appears from the record that the appellant had represented to the Chairman of CBEC on 25.4.2000, seeking a clarification in the matter, in response to which the appellant was informed by the Board by their letter dated 6.1.2000, that since the appellant had already exercised option under the Notification No. 9/99 by filing declaration under Rule 173B with effect from 1.4.1999, it was not open to the appellant to switch over to the benefits of the Notification No. 8/99 with effect from 27.4.1999 for the remaining part of the financial year, in view of the terms and conditions of the Notification No. 9/99. Similar clarification was given to the appellant on the said issue by the Joint Commissioner, Central Excise, Kanpur on 10.4.2000.