2003 (12) TMI 504 - AT - Central Excise

Summary

Issues:
1. Application for dispensing with the condition of pre-deposit of duty amount and penalty.
2. Inclusion of loading charges in the assessable value of goods.
3. Claim of demand being barred by limitation.
4. Financial hardship plea.
5. Decision on pre-deposit and stay petitions.

Issue 1: Application for dispensing with the condition of pre-deposit of duty amount and penalty

The appellants, engaged in manufacturing, sought dispensation of pre-deposit of duty amount and penalties imposed. The duty amount of Rs. 21,72,451/- confirmed against the first appellant and a personal penalty of Rs. 5 Lakhs on the second appellant were under contention. The appellants argued that the loading charges incurred for transporting goods to the dumping ground were included in the assessable value of the goods. The Revenue contended that the loading charges should be added to the assessable value. The appellants offered to deposit Rs. 5 Lakhs for Section 35F purposes.

Issue 2: Inclusion of loading charges in the assessable value of goods

The Revenue argued that loading charges incurred at the factory gate and dumping ground should be added to the assessable value, even if paid by customers. The dumping ground, considered a bonded store room, was deemed an extension of the factory premises. The loading charges were to be included in the assessable value. The Tribunal found the issue contentious and arguable, indicating that a prima facie case in favor of the appellants was not established. The appellants failed to demonstrate financial hardship. Consequently, the first appellant was directed to deposit Rs. 8 Lakhs within eight weeks. Upon this deposit, the pre-deposit of the remaining duty amount and penalty was dispensed, and recovery stayed during the appeal. The stay petition of the second appellant was unconditionally allowed.

Issue 3: Claim of demand being barred by limitation

The Tribunal noted that the claim of the demand being barred by limitation could only be assessed at the final disposal of the appeal after reviewing all evidence on record. The appellants' argument on limitation was not sufficient to grant an unconditional stay. The Tribunal emphasized that a prima facie case was crucial, and financial hardship was not established by the appellants.

Issue 4: Financial hardship plea

The appellants did not plead financial hardship before the Tribunal. Despite the absence of such a plea, the Tribunal considered all facts and circumstances before directing the first appellant to deposit Rs. 8 Lakhs within a specified period. The decision on pre-deposit and stay was made based on a holistic evaluation of the case.

Issue 5: Decision on pre-deposit and stay petitions

After evaluating the submissions from both parties, the Tribunal found the issue contentious and ruled in favor of the Revenue regarding the inclusion of loading charges in the assessable value. The Tribunal directed the first appellant to make a specified deposit within a set timeframe, allowing for the dispensation of the remaining duty amount and penalty. The second appellant's stay petition was unconditionally allowed, with compliance to be reviewed at a later date.