Case Law Details
Annamalai Cotton Mills (P) Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that imposition of penalty unwarranted as differential duty is already paid before issuance of show cause notice.
Facts- The appellant was engaged in the manufacture of polyester/cotton blended yarn falling under Chapter 55/52 of the First Schedule to Central Excise Tariff Act, 1985 and were clearing the said yarn from their factory to their consignment agents situated throughout India. The department noticed that while clearing the goods the appellant was adopting a lesser price than the price at which similar goods were sold by the said consignment agents on that date and place of removal during the period 01.07.1997 to 31.03.2001. The appellant had filed Annexure 2C price declaration as required under Rule 173C of erstwhile Central Excise Rules, 1944 in respect of goods intended to be removed for each of the consignment agents during the said period. As it was noticed that the assessable value declared was less than the price at which similar goods were sold by the consignment agents on the dates of removal, a show cause notice was issued to the appellant to demand differential duty of Rs.26,73,083/- invoking the extended period along with interest and for imposing penalties.
The original authority confirmed the demand along with interest and imposed equal penalty. Being aggrieved, the present appeal is filed.
Conclusion- Held that the appellant has admitted the liability and has paid the amount even before the issuance of SCN. We are therefore of the considered opinion that the duty demand has to be reduced to this amount. The appellant having paid it before the SCN and also as there is violation of the principles of natural justice the penalties are not warranted.
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