2005 (3) TMI 660 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty arising from default in payment while availing facility of fortnightly duty payment.

In the judgment delivered by the Appellate Tribunal CESTAT, MUMBAI, the case involved an application for waiver of pre-deposit of duty and penalty amounting to Rs. 32,09,937/- and Rs. 3,00,000/- respectively, following an order by the Commissioner of Central Excise (Appeals), Surat. The demand was upheld due to the applicants' default in payment while utilizing the fortnightly duty payment facility under Rule 8 of the Central Excise Rules, 2001, and the incorrect payment of duty through a combination of PLA and deemed credit account. The Tribunal, represented by Ms. Jyoti Balasundaram and Shri Moheb Ali M., considered the arguments presented by both sides.

Upon examination, the Tribunal found that the applicants had established a strong prima facie case for waiver as per Rule 8(3) of the Central Excise Rules, which outlines the consequences of failing to pay duty by the specified due dates. The Tribunal noted that the objection raised by the Revenue regarding the partial payment of duty through the deemed credit account was not prima facie sustainable, especially in the absence of any order prohibiting such payment method by the applicants. Consequently, the Tribunal decided to waive the pre-deposit of duty and penalty, and further ordered the stay of recovery pending the appeal process. The judgment emphasized the importance of adherence to payment deadlines and the necessity of establishing a valid objection to the payment methods utilized by the applicants.