Assessee would not get benefit of exemption if duty had not been paid on inputs

M/s Jai Ganesh Processors Vs. CCE, C, Chandigarh (High Court of Punjab and Haryana at Chandigarh) –  Even though the Hon’ble Supreme Court held that the assessee would not get benefit of exemption if duty had not been paid on inputs, the assessee held a bonafide view about interpretation of the notification. Thus, it may not be a case of deliberate evasion of duty. While the Tribunal rightly rejected the claim of the assessee that exemption was applicable, the setting aside of penalty cannot be held to be illegal. Levy of penalty is not automatic merely because an exemption was wrongly availed, even when plea of the assessee is found to be erroneous.

HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

C.E.A. No. 228 of 2010 (O&M) Date of decision: 11.03.2011

Commissioner of Central Excise Commissionerate . Vs. M/s Jai Ganesh Processors.

AND connected cases being CEA Nos.231, 233, 234, 236, 238, 242, 243, 246, 248, 249, 252, 259 to 261, 263, 264, 267, 269, 271, 276, 278, 281, 283 & 290 of 2010

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