2004 (8) TMI 440 - AT - Central Excise

Summary

Issues:
- Demand of duty under Notification No. 1/93-C.E., dated 28-2-1993
- Penalty imposition
- Application for waiver of pre-deposit and stay of recovery

Analysis:

1. Demand of duty under Notification No. 1/93-C.E., dated 28-2-1993:
The appellants were demanded duty amounting to Rs. 2,90,193/- for the period 10-12-1996 to 31-3-1997, with a penalty of Rs. 2,000/- imposed. The dispute arose as the authorities included clearances by the previous manufacturer, leading to the appellants exceeding the prescribed limit under the Notification. The Tribunal referred to a previous case, Ganesh Agro Pack, where a similar exercise by the department under a different notification was disapproved. The lower appellate authority attempted to distinguish the cases based on the interpretation of specific expressions in the notifications. However, the Tribunal found the distinction unconvincing and held that the appellants had a strong prima facie case based on the Ganesh Agro Pack case. Consequently, the waiver of pre-deposit and stay of recovery was granted in favor of the appellants.

2. Penalty imposition:
In addition to the demand of duty, a penalty of Rs. 2,000/- was imposed on the appellants. The Tribunal's decision to grant waiver of pre-deposit and stay of recovery also indirectly addressed the penalty issue, as the entire demand was under consideration and subject to the outcome of the main case. Therefore, the penalty imposition was also stayed pending the final decision on the duty demand issue.

3. Application for waiver of pre-deposit and stay of recovery:
The appellants, through their Chartered Accountant, applied for the waiver of pre-deposit and stay of recovery concerning the duty demand and penalty. The Tribunal, after considering the submissions and the precedent set by the Ganesh Agro Pack case, granted the waiver and stay as requested by the appellants. This decision provided temporary relief to the appellants by suspending the recovery process until the main case was conclusively decided, ensuring fairness and justice in the proceedings.