2006 (3) TMI 439 - AT - Central Excise

Summary

Issues:
Challenge to order confirming duty demand and penalties based on non-compliance with government directives and exemption notifications.

Analysis:
The appellant contested the Commissioner's order confirming a duty demand of Rs. 3,61,43,619.00 and penalties. The Commissioner relied on Diniatul Islam's statement indicating goods issuance from mills' godowns and delayed end-use certificates issuance. The Commissioner found Tantuja and Tantushree issuing invoices directly to buyers for goods from the appellant's factory, overlooking the significance of the 1994 notification mandating yarn allocation to these entities. The notification aimed to centralize pricing and sales to ease market burden for mills, requiring Tantuja and Tantushree to purchase yarn from the appellant.

The exemption notification under Section 5(A)(1) exempted duty on goods purchased by registered Apex Handloom Co-operative Societies, like Tantuja and Tantushree, when payment was made by them through their bank accounts. The State Govt. directive mandated these societies to buy goods from the appellant, ensuring proper distribution. The appellant emphasized no direct sales occurred, with all payments received via cheques in compliance with the exemption requirements. The notification also obligated mills to provide facilities for society use, preventing misinterpretation of direct sales by the appellant.

Considering the circumstances, the Tribunal deemed the case suitable for waiving pre-deposit, granting interim stay on the order without pre-deposit conditions. Both applications were disposed of accordingly, with the appeal scheduled for final hearing at a later date. The judgment was dictated and pronounced in open court on 15-03-2006.