2004 (8) TMI 432 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty and penalty for special packing of goods.

In this case before the Appellate Tribunal CESTAT, New Delhi, the issue revolved around an application by M/s. Jyoti Mineral Fibre for the waiver of pre-deposit of Central Excise duty amounting to Rs. 11,11,096/- and a penalty of Rs. 10 lakh. The appellant's representative argued that the special packing of slag wool in wire netting, done outside the factory premises, should not attract additional duty as it does not create a new product. The advocate referred to a Supreme Court decision in the case of Sidharth Tubes Ltd. and a circular by the Central Board of Excise & Customs to support their contention. The Department, represented by Shri S.M. Tata, maintained the demand for duty based on the cost of special packing. The Tribunal considered the appellant's argument in light of the circular and the fact that duty had already been paid on the goods, which were then packed outside the factory premises. The Tribunal found a strong prima facie case in favor of the appellant for waiver and stay of recovery of the duty and penalty amount. As a result, the Tribunal ordered the stay of recovery of the entire duty and penalty during the appeal's pendency, with the appeal scheduled for regular hearing on 26-10-2004.

This judgment highlights the interpretation of duty liability concerning the special packing of goods outside the factory premises. The Tribunal's decision to grant a stay of recovery was based on the appellant's argument that the packing process did not result in a new product and the goods had already been cleared on payment of duty. The reference to the Supreme Court decision in the case of Sidharth Tubes Ltd. and the circular issued by the Central Board of Excise & Customs played a crucial role in supporting the appellant's case for waiver. The Tribunal's consideration of these legal aspects demonstrates a balanced approach in evaluating the duty liability in cases involving additional processes like special packing carried out outside the factory premises. The stay of recovery granted by the Tribunal reflects a cautious approach to ensure fairness and justice pending the final decision on the appeal.