2006 (1) TMI 485 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duty and penalty for a 100% Export Oriented Unit (EOU) clearing goods in Domestic Tariff Area (DTA) under the Central Excise Act, 1944.

Analysis:

Issue 1: Waiver of pre-deposit of duty and penalty
The applicants sought waiver of pre-deposit of duty amounting to Rs. 26,71,455/- and penalty of Rs. 10 lakh. The Revenue had already recovered Rs. 5 lakhs through encashment of a bank guarantee. The applicants, a 100% EOU clearing goods in DTA, argued that the value of goods cleared to DTA should be determined according to the provisions of the Customs Act as if the goods were imported into India. They contended that similar goods were being imported into India at comparable prices during the disputed period. The applicants claimed that the adjudicating authority erred in relying on a previous Tribunal decision in a different case. They highlighted the availability of evidence regarding the prices of similar goods imported into India during the relevant period, emphasizing the relevance of this factor. Additionally, the applicants cited a Board Circular and pleaded financial hardship due to the closure of their unit.

Issue 2: Tribunal's Decision
After considering the facts, circumstances, and the financial hardship claimed by the applicants, the Tribunal, led by Vice-President S.S. Kang, concluded that the amount already deposited was adequate for the appeal hearing. Therefore, the Tribunal decided to waive the remaining amount of duty and penalty for the purpose of hearing the appeal. This decision was based on a holistic evaluation of the case, taking into account the arguments presented by the applicants regarding the valuation of goods cleared to DTA and the financial difficulties faced by their unit.

In summary, the Tribunal granted the waiver of pre-deposit of duty and penalty for the appeal hearing, considering the specific circumstances of the case, the arguments put forth by the applicants regarding the valuation of goods, and the financial challenges encountered by the 100% EOU in question.