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2002 (4) TMI 399 - AT - Central Excise
Issues:
- Waiver of pre-deposit of duty amount - Application for destruction of cut tobacco - Remission of duty under Rule 49 - Interpretation of Rule 196B Waiver of Pre-Deposit of Duty Amount: The case involved an application for the waiver of pre-deposit of duty amounting to Rs. 3,50,083. The applicants claimed that their factory had been closed for several years, resulting in significant accumulated losses. The Tribunal examined the submissions made by both sides. The Commissioner's order was challenged on the grounds that it exceeded the scope of the previous remand order. The applicants argued that the duty should not be demanded based on an expert's report stating the cut tobacco was unfit for manufacturing cigarettes. Despite the lack of a specific application for remission of duty under Rule 49, the Tribunal considered the circumstances and the substantial loss suffered by the applicants. As a result, the Tribunal directed the party to deposit Rs. 1.5 lakhs within six weeks, granting a waiver of pre-deposit and stay of recovery for the remaining duty amount if the directive was complied with. Application for Destruction of Cut Tobacco: The applicants had initially applied for permission to return and later destroy quantities of cut tobacco that were found to be unfit for use in cigarette manufacturing. The Commissioner, however, rejected their applications and demanded a differential duty of Rs. 3,50,083. The Tribunal noted that the Commissioner did not consider the expert's report on the deteriorated quality of the cut tobacco as relevant. The applicants' case was primarily based on Rule 196B(ii), which allowed for the destruction of damaged goods with the proper officer's permission, provided the duty payable on the goods had been remitted. The Tribunal found that the condition of remission of duty under Rule 49 had not been satisfied, leading to the rejection of the applicants' request for waiver of pre-deposit. Remission of Duty under Rule 49: The Tribunal highlighted the importance of the remission of duty under Rule 49 of the Central Excise Rules, 1944, in cases involving the destruction of goods. The lack of evidence showing any duty remission by the Commissioner under Rule 49 in this instance weakened the applicants' argument for the destruction of the cut tobacco without the demand for duty. The Tribunal emphasized the specific conditions that needed to be met for the destruction of goods under Rule 196B, including the remission of duty, which was not fulfilled in this case. Interpretation of Rule 196B: The Tribunal analyzed the provisions of Rule 196B, which allowed for the destruction of unfit or damaged goods with the proper officer's permission. The rule required the remission of duty on the goods before their destruction. The Tribunal found that the applicants had not satisfied this condition, as there was no record of any duty remission under Rule 49. Despite the lack of a strong prima facie case for waiver of pre-deposit, the Tribunal considered the applicants' circumstances, including the closure of their factory and significant losses, and granted a partial waiver of pre-deposit upon the deposit of a specified amount within a set timeframe.
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