2003 (9) TMI 654 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty and penalty based on the benefit of Notification No. 202/88-C.E.

Analysis:
1. Waiver of Pre-deposit: M/s. Ravi Steel filed an application seeking waiver of pre-deposit of Central Excise duty amounting to Rs. 9,75,700/- and an equal amount of penalty. The duty was confirmed, and the penalty imposed by the Commissioner disallowed the benefit of Notification No. 202/88-C.E. The issue revolved around the manufacturing of M.S. Round Bars from scrap railway material, deemed non-duty paid. The appellant's representative cited a judgment by the Allahabad High Court in the case of Laxmi Rolling Mills & Ors., which held that the benefit of the notification is applicable to M.S. Bars made from rollable/re-rollable material like old rails, wheels, fish plates, etc., purchased from Railways.

2. Legal Precedent: The Allahabad High Court's decision in the Laxmi Rolling Mills case was crucial to the application. The court's ruling clarified that the benefit of Notification No. 202/88 is not deniable to bars made from specific materials obtained from Railways. The appellant argued that this legal precedent supported their case, emphasizing that the Supreme Court had dismissed the Revenue's Special Leave Petition (SLP) against the Allahabad High Court's decision. This legal backing strengthened the appellant's position in seeking the waiver of pre-deposit.

3. Tribunal's Decision: Considering the judgment of the Allahabad High Court in the Laxmi Rolling Mills case, the Tribunal found that the applicants had established a strong prima facie case in their favor. As a result, the Tribunal decided to stay the recovery of the entire duty amount and penalty during the appeal's pendency. The matter was scheduled for regular hearing on 18-11-2003, indicating that the Tribunal acknowledged the significance of the legal precedent cited by the appellant in granting the stay on recovery.

In conclusion, the judgment by the Appellate Tribunal CESTAT, New Delhi, highlighted the importance of legal precedents in determining the applicability of notifications and benefits under Central Excise laws. The decision to grant a stay on recovery based on the Allahabad High Court's ruling exemplified the Tribunal's adherence to established legal principles and interpretations in resolving disputes related to duty payments and penalties.