2003 (10) TMI 524 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty and penalty based on the inclusion of expenses in assessable value.
2. Barred by limitation for the demand raised in the show cause notice.
3. Application of the Larger Bench decision in the case of Jay Yuhshin Limited v. CCE, New Delhi.
4. Application of the Supreme Court decision in the case of Amco Batteries Ltd. v. CCE, Bangalore.

The judgment addresses the application for waiver of pre-deposit of duty and penalty amounting to Rs. 67,48,720/- each, arising from the Commissioner of Central Excise, Mumbai's order confirming the demand by including administrative expenses and profit margin in the assessable value of goods cleared by the Borivli unit to their Daman unit. The contention raised was that the demand for the period 1997-98 to 2001-2002 is time-barred, as the duty demand confirmed was available as Modvat credit to the recipient unit at Daman, rendering suppression allegations inapplicable. This argument was supported by the Larger Bench decision in Jay Yuhshin Limited v. CCE, New Delhi, where it was held that revenue neutrality through Modvat credit availability would make the extended period inapplicable. The Tribunal found this argument acceptable in the present case, noting that the recipient unit at Daman had paid duty exceeding the confirmed amount against the Borivli unit, thus applying the Supreme Court decision in Amco Batteries Ltd. v. CCE, Bangalore. Consequently, the Tribunal waived the pre-deposit requirement of duty and penalty and stayed the recovery pending the appeal.

In conclusion, the judgment extensively analyzed the issues surrounding the waiver of pre-deposit of duty and penalty, the limitation period for the demand, and the application of relevant legal precedents such as the Larger Bench decision in Jay Yuhshin Limited and the Supreme Court decision in Amco Batteries Ltd. The decision was made in favor of the appellant based on the acceptance of the argument regarding Modvat credit availability and revenue neutrality, ultimately leading to the waiver of pre-deposit requirements and the stay of recovery pending the appeal.