COMMISSIONER OF CENTRAL EXCISE Vs. VASU CHEMICALS

JUDGEMENT

(1.) The appellant is the Revenue and aggrieved by the dismissal of the appeal by the Customs, Excise & Service Tax Appellate Tribunal, Southern Region Bench, Chennai (in short 'CESTAT') dated 17.08.2006 holding that any interest on duty under Section 11 AB and to impose penalty under Section 11 AC cannot be levied prior to 28.09.1996 as well as rejecting the contention of the claim of the Revenue demanding duty from M/s.Vasu Chemicals, Madurai for the year 1992 is no longer valid, came forward to file this appeal and in the grounds of appeal, the following substantial question of law are raised:

(2.) The respondent herein was issued with a show cause notice as to materials and other goods polishing bars seized on 11.10.1996 and 12.10.1996 from various places/dealers detailed in the show cause notice and provisionally released should not be confiscated under rules 173Q and 226 of CER, 1944 and also as to the demand of duty liable and penalty along with interest. The Original Authority vide proceedings dated 29.01.1998 had confirmed the same to the tune of Rs.46,58,289/- under Rule 9(2) read with Section 11A(2) of Central Excise Act,1944 towards the duty liability on the polishing bars manufactured and cleared illicitly during 1993-1994 to 1996-1997 (upto 11.10.1996) and imposed penalty of Rs.9,20,000/- and as regards the levy of mandatory penalty/interest, the Original Authority finds that invoking Section 11AB and 11AC, cannot be ordered retrospectively as those provisions came into effect only on 28.09.1996. The Revenue aggrieved by the afore-stated portions of the order had filed the appeal. The Tribunal, after considering the rival submissions on either side found that the appeal filed in CMA(MD).No.1220 of 2005 is pending without any interim orders and as such the claim made by the Revenue for the year 1992-1993 is no longer valid and further found that the question as to whether the clearances made by the respondent herein during the year 1993-1994 to 1996-1997 was liable to be treated as cum-duty value in terms of Section 4(4)(d)(ii) is also covered against the appellant herein in the light of the judgment of Hon'ble Supreme Court reported in Commissioner of Central Excise Vs. Maruthi Udyog Ltd, 2002 141 ELT 3 and also held that Section 11 AB and 11 AC came into force on 28.09.1996 and as such, it cannot be levied prior to 1996 as held by the Supreme Court judgment , Commissioner of Central Excise, Coimbatore Vs. Elgi Equipments Ltd, 2001 128 ELT 52. Learned Counsel appearing for the appellant / revenue would contend that the Tribunal has not properly appreciated the factual aspect and legal position and erroneously held in favour of the respondent and therefore, prays for interference.

(3.) Per contra, learned Counsel appearing for the respondent would contend that the Tribunal has taken into consideration that in the absence of any interim order in CMA(MD).No.1220 of 2005 and also the fact that the plea put forth by the appellant/revenue is also covered by two decisions of the Hon'ble Supreme Court of India as cited supra, has rightly reached the conclusion and accordingly, dismissed the order impugned in this Civil Miscellaneous Appeal and the substantial questions of law raised by the appellant deal with only the factual aspects and prays for dismissal of this appeal.