2002 (11) TMI 335 - AT - Central Excise

Summary

Issues:
Stay applications against Order-in-Original; Retrospective amendment to Section 3 of Central Excise Act; Assessable value calculation; Abatement under Rule 7 of Customs (Valuation) Rules; Addition of Customs duty to assessable value; Imposition of duty under Goods of Special Importance Act; Exemption under Notification No. 127/84-C.E.; Imposition of cess; Representation for exemption under Section 11AC; Pre-deposit waiver request.

Analysis:
The Appellate Tribunal CEGAT, Mumbai, heard stay applications by multiple appellants against an Order-in-Original passed by the Commissioner of Central Excise and Customs, Nagpur. The appellants argued that demands arose due to a retrospective amendment to Section 3 of the Central Excise Act, covering a period from July 1999 to October 2000. They contended that there was no suppression of facts, and invoices for DTA sales were duly submitted. The appellants claimed that the assessable value should allow abatement for profit and duty under Rule 7 of the Customs (Valuation) Rules, 1988. They also challenged the addition of Customs duty to the assessable value, citing exemption under Notification No. 89/92. Moreover, they disputed the imposition of duty under the Goods of Special Importance Act, which they argued was exempted under Notification No. 127/84-C.E. The appellants also questioned the imposition of cess, already paid to the Textile Committee. They sought exemption under Section 11AC and requested a waiver of pre-deposit of Rs. 62 lakhs of duty and penalty.

The Joint Commissioner of Central Excise argued that additional duty under the Goods of Special Importance Act and cess should be paid in addition to the basic excise duty. He contended that the Customs duty should not be abated under Rule 7 of the Customs (Valuation) Rules and supported the Commissioner's decision to use invoice value for assessable value calculation. The Joint Commissioner proposed a pre-deposit of Rs. 2.2 crores by the appellants.

After hearing both sides and considering financial hardship, the Tribunal noted discrepancies in the appellant's duty liability calculations. The appellants were directed to make a pre-deposit of Rs. 62 lakhs within three months, based on their estimated duty liability of Rs. 83 lakhs, with Rs. 20.95 lakhs already paid under protest. Upon compliance, the pre-deposit waiver was granted for the remaining duty and penalty amounts, staying the recovery process.