2004 (4) TMI 397 - AT - Central Excise

Summary

Issues: Modification of pre-deposit order based on the amendment of Notification 82/92-C.E. to extend exemption benefits to 100% EOU.

In this judgment by the Appellate Tribunal CESTAT, Mumbai, the issue involved was the modification of an order directing a pre-deposit of Rs.10 lakhs towards duty demand. The applicants sought this modification based on the amendment of Notification 82/92-C.E. in May 2001 through Notification 28/2001-C.E., which extended the benefit of exemption to the whole duty of excise leviable under Section 3 of the Central Excise Act, 1944 to clearances of excisable goods by 100% EOU to persons holding advance release orders. The applicants argued that the differential duty demand confirmed by the impugned order was not sustainable due to this amendment, and thus, requested the pre-deposit requirement to be waived and recovery stayed.

The learned DR opposed the prayer, contending that the plea was not raised at the appropriate stage during the stay application argument and, therefore, could not be raised at a subsequent modification stage. However, the Tribunal considered the plea raised by the applicants as a legal issue that could be addressed at this stage. The Tribunal acknowledged that the applicants had presented a strong prima facie case that the differential duty demand may not be sustainable in light of Notification 28/2001. Consequently, the Tribunal decided to modify the earlier order by dispensing with the pre-deposit requirement and staying the recovery pending the appeal.

Ultimately, the Tribunal allowed the application for modification, thereby granting the relief sought by the applicants based on the amendment of the notification and the legal arguments presented. The decision highlighted the significance of legal considerations in modifying pre-deposit orders and staying recovery pending an appeal, emphasizing the impact of statutory amendments on duty demands and exemptions available to specific entities like 100% EOU.