LAWS(CE)-2008-12-47

POWERICA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, DAMAN

Decided On December 11, 2008
Powerica Ltd. Appellant
V/S
Commissioner Of Central Excise, Daman Respondents

JUDGEMENT

(1.) THE demand of Rs. 7,25,299/ - stands confirmed against the appellant in respect of the goods manufactured and cleared by them to their own sister unit for captive consumption on the ground of undervaluation of the same. The said demands stand confirmed by way of issuance of a show cause notice dated 3 -8 -2005 for the periods 2001 -02 to 2002 -03. As such, it is seen that the entire demand is barred by limitation. The appellants have also pleaded that inasmuch as the goods were being transferred to their own sister unit, who were availed the benefit of Modvat credit, the entire exercise if revenue neutral.

(2.) WE find that the Commissioner (Appeals) in para -5 of his impugned order has held as under : -

(3.) AS such, it is seen from the above, there is a clear finding by the appellate authority that there was no mala fide intent to evade duty by undervaluation of the impugned goods. As such, he has set aside penalty imposed under Section 11AC. He has also observed that there was scope of difference in interpretation in the CBEC circular operative at the material time. We are of the view that the same ingredients which are required for imposing penalty in terms of Section 11AC, would be relevant for the purposes of invocation of longer period. In view of a clear finding of the appellate authority that there was no mala fide on the part of the appellants, the proviso to Section 11A cannot be invoked. We accordingly on this ground itself set aside the impugned order and allow the appeal with consequential relief to the appellants.