Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), New Delhi has held that penalty will not sustain after deletion of disallowance of area-based exemption as per Excise Notification.
The appellant, Sanjeev Jindal is a former Director of M/s. Kotdwar Steals Limited. During the assessment a penalty of Rs.5 Lakhs was imposed upon the appellant under rule 26 of the Central Excise Rules, 2002 alleging that the Company and its Directors claimed granted area-based exemption wrongly.
The counsel for the appellant submitted that on appeal the contention of the Department that a Company was not entitled to claim area-based exemption was rejected by the Tribunal and hence, the penalty imposed upon the appellant merely for the reason that the Company was not entitled to claim the area-based Exemption, deserves to be set aside.
The Coram of Mr. Justice Dilip Gupta, President has held that “the impugned order dated December 27, 2011, in so far as seeks to impose a penalty of Rs.5 lakhs on the appellant, therefore, deserves to be set aside and is set aside. The appeal is, accordingly, allowed”.
Advocate Mr. Shri Ajay Kumar appeared on behalf of the appellant and Mr. Rakesh Agarwal appeared on behalf of the revenue.
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