ORDER
V.K. Agrawal, Member (T)
1. Revenue filed this appeal as the Commissioner (Appeals) has set aside the penalty imposed by the Adjudicating Authority on M/s. G.M. Laminates Pvt. Ltd.
2. The respondents have requested for adjournment of hearing as their Director is not in a position to attend the hearing on account of some unavoidable personal work. As the issue involved in this appeal is in narrow compass, we reject the application for adjournment of the haring and take up the appeal for disposal after hearing Sh. V. Valte, learned SDR and perusing the records.
3. The learned S.D.R. submitted that the respondents manufactured paper based (bonded) decorative laminated sheets in respect of which they had claimed concessional rate of duty under Notification No. 20/94 CE dated 1.3.94; that the benefit of said notification was not available to them and as such during the period from 9.2.94 to 21.12.94, they had short-paid Central Excise duty amounting to Rs. 5,34,770.95; that the show cause notice dated 17.2.95 was issued to them for demanding the differential duty; that the Additional Commissioner, under the adjudication order No. 9/03 dated 6.3.03, confirmed the demand and imposed a penalty of Rs. 5 lakh; that the Commissioner (Appeals), however, has set aside the amount of penalty on the ground that the penalty is to imposable in a dispute about the classification or interpretation of notification. The learned S.D.R. emphasised that the respondents had adopted delaying tactics by not appearing for personal hearing till February, 2003 to keep the case pending with intent to avoid payment of duty as well as penalty demanded in the show cause notice even though their appeal, in a similar case, has been dismissed by the Supreme Court in November, 1998 as reported in 1994 (107) ELT A 51; that it has been categorically held that decorative laminated sheets obtained by coating the paper with resole are classifiable under heading 39.09 of the Schedule to the Central Excise Tariff Act; that as the respondents had enjoyed financial accommodation for the period of four years, the penalty has been rightly imposed under Rule 173Q of the Central Excise Rules.
4. We have considered the submissions of the learned D.R. and perused the records. We observe that in the present matter a show cause notice was issued on 17.2.95 and has been adjudicated by the Additional Commissioner only on 6.3.03. It the matter has been decided against the respondents in 1999, as claimed in the Memorandum of Appeal, there appears to be no reason for keeping the adjudication of the present show cause notice pending for more than four years. A perusal of the adjudication order reveals that after Feb., 1998, a personal hearing was fixed only on 28.10.02 and thereafter on the next date i.e. 29.10.02 and 11th & 12th Nov., 2002. It the Revenue itself has not adjudicated the matter for such a long time, the penalty cannot be imposed on the respondents Just for not appearing for the personal hearing. A penalty under rule 173Q of the erstwhile rules 1944 can be imposed only for the violation/contravention of Central Excise Rules mentioned therein. the Revenue has not disputed that they had filed the classification list claiming the benefit of notification. The Commissioner (Appeals) has relied upon the Tribunal’s decision in the case of Haryana Roadways Engineering Corporation Ltd. Vs. CCE., New Delhi 2002-TAXINDIAONLINE-100-CESTAT-DEL wherein it has been held that no penalty is imposable in view of the fact that the issue involved is interpretation of Central Excise Tariff. We also agree with the finding of the Commissioner (Appeals) that the duty is to be deposited by the respondents only after passing of the adjudication order. We, therefore, find no reason to interfere with the impugned order. Accordingly, we rejected the appeal filed by the Revenue.