2005 (2) TMI 557 - AT - Central Excise

Summary

Issues:
Modification of Stay Order for pre-deposit, Applicability of Section 35F of Central Excise Act, Waiver of pre-deposit of duty and penalty under Section 11D.

Analysis:

1. Modification of Stay Order for Pre-deposit:
The applicants sought modification of the Stay Order directing pre-deposit of the entire demand, which had been dismissed earlier for non-prosecution. They argued that during a previous hearing, the question of the applicability of Section 35F of the Central Excise Act was raised but not considered by the Bench. The applicants contended that the order for pre-deposit was dispatched late, hindering compliance. The applicants requested a decision based on their detailed written submissions. The Tribunal acknowledged that the written submissions were not taken into account while directing pre-deposit.

2. Applicability of Section 35F of Central Excise Act:
The applicants argued that recovery under Section 11D of the Act was impermissible during the disputed period (1995-96, 1996-97, 1997-98) due to the absence of machinery provisions under that section. The Tribunal considered the submissions and referred to previous judgments like Pushpaman Forgings v. C.C.E. and the decision of the Madras High Court in Eternit Everest Ltd., which supported the argument that machinery provisions under Section 11D did not exist during the period in question. Based on this, the Tribunal found a strong prima facie case for waiver of pre-deposit of duty and penalty.

3. Waiver of Pre-deposit of Duty and Penalty under Section 11D:
After careful consideration of the rival submissions and the records, the Tribunal waived the pre-deposit of duty and penalty. The Tribunal was satisfied with the arguments presented by the applicants and the legal precedents cited, leading to the decision to stay the recovery of the duty and penalty pending the appeal. The Tribunal directed that a copy of the order be provided to both parties immediately.

In conclusion, the Tribunal granted the waiver of pre-deposit of duty and penalty under Section 11D based on the arguments presented by the applicants regarding the absence of machinery provisions during the disputed period. The Tribunal also acknowledged the procedural issues raised by the applicants regarding the previous hearing and the dispatch of the order.