2004 (5) TMI 479 - AT - Central Excise

Summary

Issues Involved:
1. Pre-deposit of duty amount and compliance with the tribunal's order.
2. Benefit of Notification No. 125/84-C.E. for goods cleared in DTA by a 100% EOU.
3. Legal implications of the Tribunal's decision in Pratap Singh case and subsequent Larger Bench decision in Himalaya International Ltd.
4. Financial hardships faced by the party and reduction of the quantum of duty for pre-deposit.

Analysis:

Issue 1: Pre-deposit of duty amount and compliance
The tribunal had directed the appellants to pre-deposit Rs. 45 lakhs within 3 months, but instead of complying, the party sought modifications. They had paid Rs. 5 lakhs earlier and claimed eligibility for benefit under Notification No. 125/84-C.E. The tribunal considered the financial hardships faced by the party and reduced the pre-deposit amount to Rs. 25 lakhs, modifying the earlier order.

Issue 2: Benefit of Notification No. 125/84-C.E. for goods cleared in DTA
The party claimed the benefit of Notification No. 125/84-C.E. based on a miscellaneous order from the West Zonal Bench in favor of another 100% EOU. However, a departmental clarification indicated that the benefit may not apply if goods manufactured by a 100% EOU are sold in India, as was the case with the goods in question. Therefore, the tribunal reserved the legal arguments related to this notification for consideration during the appeal.

Issue 3: Legal implications of tribunal decisions in Pratap Singh and Himalaya International Ltd.
The tribunal discussed conflicting decisions in Pratap Singh and Himalaya International Ltd. regarding the applicability of Section 3(1) of the Central Excise Act to DTA clearances by 100% EOUs. The dismissal of an SLP filed against the Pratap Singh decision did not overrule the Larger Bench decision in Himalaya International Ltd., leading the tribunal to conclude that the miscellaneous order from the West Zonal Bench was not helpful to the applicants.

Issue 4: Financial hardships and reduction of duty quantum
Despite the legal arguments presented, the tribunal acknowledged the financial difficulties faced by the party and decided to reduce the quantum of duty for pre-deposit to Rs. 25 lakhs. The party was directed to deposit the balance amount within 30 days. The application for early hearing was dismissed as the appeal had already been ordered for out-of-turn posting.

This detailed analysis covers the various issues addressed in the judgment, including pre-deposit compliance, legal interpretations of notifications and tribunal decisions, and considerations of financial hardships in determining the duty quantum.