NAV BHARAT UDYOG Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) In this appeal the appellants have challenged the validity of the impugned order -in -original vide which penalty of Rs. 10,000/ - under Rule 173Q has been imposed while rejecting the prayer of the appellants for paying the duty under the compounded levy scheme.

(2.) The learned Counsel has contended that even if the appellants are taken to be not entitled to the benefit of Notification No. 16/01 and are not covered by the compounded levy scheme, for discharge of duty, still no penalty under Rule 173Q could be imposed as the appellants had already paid excess duty and even claimed refund of the same in the reply to the show cause notice. He has also contended that the plea taken up by the appellants in the show cause notice had not even been considered. Therefore, the impugned order should be set aside. On the other hand the learned JDR has reiterated the correctness of the impugned order.

(3.) I have heard both the sides and gone through the record. The perusal of the record shows that the appellants submitted an application in proforma -ASP -I before the Commissioner on 15 -5 -2001 under Rule 96ZNA opting thereunder to avail the compounded levy scheme, applicable to independent Textile Processors, engaged in the manufacture of specified processed textile fabrics. They also paid the duty under the said Scheme as detailed by them in the reply to the show cause notice. They even alleged that they had paid excess duty and claimed refund of Rs. 6,37,593.88 as detailed by them in the annexure C, to their reply. But the Commissioner has not at all considered this plea of the appellants. She has rejected their application for compounded levy scheme availment and imposed penalty under Rule 173Q. But even if it is taken that the appellants are not entitled to avail the benefit of compounded levy scheme, still penalty under Rule 173Q could not be imposed, especially when it is not the case of the Department that the appellants have failed to pay duty on ad valorem basis. Rather it is evident that they had paid duty under the said Scheme and prayed for the refund of the excess duty paid by them. The Commissioner should have gone into and examine this plea of the appellants instead of simply rejecting their ASP -I proforma. No specific violation of any provision of Rule 173Q by the appellants had been pointed out by her. The fact that they were found to be not entitled to the compounded levy scheme benefit, did not warrant the invokation of Rule 173Q against them for imposition of penalty when the entire duty had already been paid by them. Therefore, keeping in view all the facts and circumstances of the case, the impugned order cannot be legally maintained and is set aside.