VANDANA DYEING PVT. LTD. Vs. CCE

JUDGEMENT

(1.) FOR reasons recorded below we waive pre -deposit of penalty of Rs. 2,000/ - and stay recovery thereof and proceed to hear and decide the appeal itself with the consent of both sides.

(2.) THE brief facts are that the appellants herein are independent textile processors manufacturing notified goods under Notification 41/98 dated 16.12.1998 on which duty has to be paid on compounded levy basis under Section 3A of the Central Excise Act on the basis of Hot Air Stenter Machines. The Commissioner of Central Excise vide his order dt. 6.1.2000 finally determined the rate of duty as Rs. 2 lakhs per chamber. The determination was done by including the length of galleries in the chambers of the hot air stenter. The stenter was closed from 6.1.2000 to 13.1.2000 and hence the appellants were granted abatement in duty of Rs. 37,161/ -. This duty demand was confirmed by the Dy. Commissioner relying upon the circular dated 27.2.1999 of the Government of india and Explanation 1 to Notification 42/98. The ad judicating authority confirmed the duty of Rs. 37,167/ - and also imposed a penalty of Rs. 2,000/ - in terms of Sub -rule 5(2) of Rule 96ZQ of the Central Excise Rules, 1944. The assessee challenged the quantification. The Commissioner (Appeals) dismissed the appeal of the assessee on the grounds inter alia that no appeal had been filed by the assessees against the determination of the duty liability and further on the ground that the issue relating to inclusion of length of galleries in the hot air stenter chambers was sub judice. Hence this appeal.

(3.) WE find that the basic issue, namely, as to whether the length of galleries is to be included in the hot air stenter chamber length has been finally settled by the larger bench of the Tribunal in the case of Sangam Processors Bhilwara Ltd. v. CCE, Jaipur in which it has been held that the gallery length is not required to be included while computing the length of the chamber of the hot air stenter. Therefore the basic duty liability is unsustainable and the non -challenging of the determination in such cases cannot preclude the appellant from challenging it at the stage of quantification. Further we note the submission of the appellants that in addition to the plea that no penalty is imposable because the basic duty demand itself is not sustainable, in fact, there was no delay in payment of the duty and therefore should not have been imposed for delayed payment which is the ground for imposition of penalty in the relevant sub -rule relied upon by the adjudicating authority.