UNIFLEX CABLES LTD. versus COMMISSIONER, CENTRAL EXCISE, SURAT-II

Citation: [2011] 10 S.C.R. 591 · Decided: 24-08-2011 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA, ANIL R. DAVE · Disposal: Case Partly allowed

Judgment (excerpt)

(2011] 10 S.C.R. 591 
UNIFLEX CABLES LTD. 
v. 
COMMISSIONER, CENTRAL EXCISE, SURAT-II 
(Civil Appeal No. 5870 of 2005) 
AUGUST 24, 2011 
[DR. MUKUNDAKAM SHARMA AND 
ANIL R. DAVE, JJ,] 
A 
B 
Central Excise - Central Excise Rules, 1944 - Rules 
173Q(1) and 173-B - Exemption Notification - Benefit under C 
- Entitlement to- Notification no. 205188-C.E. dated 25.05.88 
as amended by Notification no.57195 granted exemption from 
payment of central excise duty in respect of manufacture of 
wind mills, parts of wind mills and specially designed devices 
which run on wind mills - Appellant filed declaration claiming o 
nil rate of duty so as to avail benefit under the aforestated 
notification for the insulated electrical cables manufactured 
by it and supplied to the manufacturers of wind mills for using 
the same as part of wind mills - Commissioner, Central 
Excise, however, confirmed demand of excise duty and also 
E 
imposed penalty under Rule 173Q(1) - Order upheld by 
Tribunal - Two issues: 1) Whether the insulated electrical 
cables manufactured by the appellant were eligible for 
exemption under the said exemption notification and 2) 
Whether imposition of penalty was justified in view of the facts 
F 
and circumstances of the case - Held: The first issue is no 
more res integra in view of the Supreme Court judgment in 
the case of Nicco Corporation Ltd* and is decided in favour 
of the Revenue - As regards the second issue about the 
imposition of penalty, the Commissioner, himself in his order-
G 
in-original has stated that the issue involved in the case was 
of interpretationa/ nature - Keeping in mind the said factor, 
the Commissioner thought it fit not to impose harsh penalty 
and a penalty of Rs. 5 Jakhs was imposed on the appellant 
591 
H 
592 
SUPREME COURT REPORTS 
[2011] 10 S.C.R. 
A 
while confirming the demand of the duty - The Commissioner 
also found that it was difficult to hold that the appellant 
- knowingly dealt with excisable goods which were cleared 
without payment of duty - The Department itself also did not 
take it as a formal case of offence - In view of the aforesaid 
B facts, no penalty could be and is liable to be imposed on the 
appellant - Central Excise Tariff Sub-Heading No. 8544. 00. 
The appellant is engaged in the manufacture of 
insulated wires and cables falling under Central Excise 
Tariff Sub-Heading No.8544.00. It claimed benefit under 
C Notification no. 205/88 - C.E. dated 25.05.88 as amended 
by Notification no. 57195 which granted exemption from 
payment of central excise duty in respect of manufacture 
of wind mills, parts of wind mills and any specially 
designed devices which run on wind mills. The appellant 
D filed declaration under Rule 173-B of the Central Excise 
Rules, 1944 claiming nil rate of duty so as to avail benefit 
under the aforestated notification for the insulated cables 
manufactured by it and supplied to the manufacturers of 
wind mills for using the same as part of wind mills. As the 
E appellant had not paid excise duty on the electrical 
cables supplied to the manufacturers of wind mills, show 
cause notices were issued to the appellant by the 
Revenue-Authorities for recovery of excise duty. 
According to the Authorities, the electric cables were 
F neither parts nor specially designed devices, which were 
necessary for manufacturing or running wind mills. For 
the aforestated reasons, according to the authorities, 
benefit under the aforestated notification could not have 
been availed by the appellant. Ultimately, the 
G Commissioner, Central Excise confirmed the demand of 
excise duty and imposed penalty under Rule 173Q(1) of 
the Rules. The appellant preferred appeal before the 
tribunal which was dismissed. Aggrieved, the appellant 
preferred the instant appeal under Section 35-L (b) of the 
H Central Excise Act, 1944. 
UNIFLEX CABLES LTD. v. COMMISSIONER, 
593 
CENTRAL EXCISE, SURAT-II 
Two issues arose for adjudication in the present A 
case: 1) Whether the insulated electrical cables 
manufactured by the appellant would be eligible for 
exemption under the above mentioned exemption 
notification and 2) Whether imposition of penalty was 
justified in view of the facts and circumstances of the 
B 
case. 
Partly allowing the appeal, the Court 
HELD:1. So far as the first issue is concerned, it is 
no more res integra in view of the judgment delivered by 
C 
this Court in the case of Nicco Corporation Ltd.* The facts 
in the said case as 

Excerpt shown. Read the full judgment & AI analysis in Lexace.