2005 (3) TMI 624 - AT - Central Excise

Summary

Issues:
Application for waiver of pre-deposit of Central Excise Duty and penalty based on the interpretation of Notification No. 14/2002 regarding duty payment on yarn for export.

Analysis:
The case involved an application by M/s. Vijayeswari Textiles Ltd. seeking waiver of pre-deposit of Central Excise Duty and penalty amounting to Rs. 3,30,319/- each. The appellant claimed they were entitled to the benefit of Notification No. 14/2002 as they were receiving yarn under bond for manufacturing woven fabrics meant for export. The dispute arose because the Department contended that the appellant did not fulfill condition No. 5 of the notification, which required the payment of appropriate excise duty on the yarn. The appellant relied on a Tribunal decision in the case of Commissioner of Central Excise, Jaipur-I v. Parasrampuria Synthetics Ltd., arguing that goods under bond for export are neither exempted nor subject to a 'Nil' rate of duty, thus making them eligible for the notification benefit. On the other hand, the Department, represented by Shri C. Mani, contended that as no duty was paid on the yarn, the exemption condition necessitating duty payment on inputs, as per the Supreme Court judgment in the Dhiren Chemical Industries case, was not met.

The Tribunal, comprising S/Shri V.K. Agrawal and M.P. Bohra, considered the arguments presented by both sides. Referring to the precedent set in the case of Parasrampuria Synthetics Ltd., the Tribunal found that the appellant had established a strong prima facie case in their favor for the waiver and stay of recovery of the entire duty and penalty amounts. Consequently, the Tribunal granted a stay on the recovery of the duty and penalty during the appeal's pendency. Additionally, the appellant's request for a 'Dasti' order, due to the Department detaining their goods, was acknowledged and the order was pronounced in open court.

In conclusion, the Tribunal's decision was based on the interpretation of the conditions of Notification No. 14/2002 regarding the payment of excise duty on yarn for export purposes. The Tribunal found merit in the appellant's argument, supported by a relevant precedent, leading to the grant of a stay on the recovery of duty and penalty amounts pending the appeal process.