2003 (10) TMI 481 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 57CC of Central Excise Rules regarding duty payment on captively consumed goods.

Analysis:
The case involved an application for stay against an order confirming a demand for duty under Section 11A read with Rule 57-I of the Central Excise Act. The dispute centered around the applicability of Rule 57CC in a situation where the final product (country liquor) was non-excisable, leading to a demand for duty reversal on the input (molasses) used in manufacturing denatured spirit. The department contended that Rule 57CC did not apply when goods were captively consumed, resulting in a demand for duty reversal of Rs. 32,00,667. The appellant argued that the comparative price of the same goods sold by other manufacturers should be used to calculate the 8% duty under Rule 57CC, citing a decision by the Commissioner of Central Excise in a similar case.

The appellant contended that the impugned order deviated from the decision of the Commissioner (Appeals) in a similar case, where the method of calculating duty based on comparative prices was upheld. The appellant argued that adopting a different interpretation in their case amounted to a departure from established practice and created undue hardship due to the pre-deposit of the demanded duty. The Tribunal noted the conflicting views adopted by the department on the applicability of Rule 57CC in similar cases, leading to discrimination among similarly placed assesses. Consequently, the Tribunal found that a strong prima facie case was established in favor of the appellant.

In its decision, the Tribunal waived the pre-deposit of duty, considering the strong prima facie case made by the appellant and the inconsistent application of the law by the department. The Tribunal highlighted the need for consistent interpretation and application of rules to avoid discrimination among taxpayers facing similar circumstances. The judgment emphasized the importance of upholding established practices and ensuring fairness in the enforcement of excise duty regulations.