2005 (3) TMI 620 - AT - Central Excise

Summary

Issues:
- Entitlement for the benefit of Notification No. 8/97-C.E., dated 1-3-97
- Financial hardship plea by the applicants

Entitlement for the benefit of Notification No. 8/97-C.E., dated 1-3-97:
The case revolved around the applicants seeking waiver of pre-deposit of duty amounting to Rs. 13.01 Crores, claiming the benefit of Notification 8/97-C.E., which exempts finished products from 100% Export Oriented Units (EOU) wholly manufactured in India. The issue arose as the applicants were using imported Indigo Pure for coloring Cotton yarn and fabrics sold domestically, leading to the denial of the notification benefit. Previous judgments in the Tribunal and High Court had ruled against the applicants, emphasizing that the use of imported dye as a raw material disqualifies them from the notification's benefits. The Tribunal reiterated this stance, citing precedents and the necessity for the finished product to be wholly produced from Indian raw materials to qualify for the exemption.

Financial hardship plea by the applicants:
The applicants pleaded financial hardship due to the required deposit amount, arguing that complying would cause undue financial strain. However, the Revenue countered this plea by presenting the firm's Annual Report, indicating significant profits, which weakened the financial hardship argument. The Tribunal referenced legal precedents emphasizing the importance of not granting interim orders solely based on a prima facie case, especially in matters concerning public revenue. Given the settled nature of the issue against the applicants in previous judgments and the lack of grounds to waive the pre-deposit, the Tribunal directed the applicants to deposit the remaining duty amount within a specified timeframe, considering the already deposited sum and the lack of prejudice to the Revenue's interest.

In conclusion, the Tribunal upheld the denial of the notification benefit to the applicants, considering past judgments, financial evidence, and legal principles regarding interim orders and public revenue matters.