2006 (1) TMI 381 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duty and penalty on packing material cleared for export.

Analysis:
The judgment revolves around the application for waiver of pre-deposit of duty and penalty amounting to Rs. 7,97,201/- and Rs. 50,000/- respectively. The case originated from the order of the Commissioner of Central Excise (Appeals) confirming the demand on packing material, specifically corrugated and duplex boxes, cleared by the appellants to merchant exporters. The issue arose as the packing material was not exported directly from the appellants' unit or through the merchant exporters directly from the appellants' unit as mandated by a CBEC Circular dated 25-7-2002.

The Tribunal, comprising Ms. Jyoti Balasundaram and Shri S.S. Sekhon, analyzed the case and acknowledged that a strong prima facie case for waiver exists. The Tribunal noted that the goods in question were those on which no excise duty is payable since the packing material was exported along with the frozen marine products. This scenario exempts these clearances from excise duty payment, as per the SSI Notification 8/2002-C.E., dated 1-3-2002. The notification clarifies that clearances for home consumption, for the purpose of the notification, do not include clearances for export to Bhutan and Nepal. In this case, the goods were not exported to Bhutan or Nepal by the merchant exporters.

Consequently, the Tribunal decided to waive the pre-deposit of duty and penalty, along with staying the recovery pending the appeal. This decision was pronounced in court, providing relief to the appellants in the matter concerning the duty and penalty on the packing material cleared for export.