2006 (3) TMI 628 - AT - Central Excise

Summary

Issues:
1. Challenge to the order demanding duty and imposing penalty
2. Interpretation of notifications regarding rebate of excise duty on exported goods
3. Barred by limitation claim for a part of the demand

Analysis:

Issue 1: Challenge to the order demanding duty and imposing penalty
The applicant challenged the order of the Commissioner demanding duty amounting to Rs. 1,05,97,800.04 and imposing a penalty of the same amount. The applicant argued that certain communications from the Government did not alter the nature of the rebate specified in the notification issued by the Central Government under Rule 12 of the Central Excise Rules. Rule 12 allows for the grant of rebate of duty paid on excisable goods and materials used in their manufacture when exported outside India or supplied to foreign-going aircraft, subject to specified conditions. The Commissioner's finding that the rebate was wrongly taken in the absence of specific allowance for Nepal and Bhutan appears justified.

Issue 2: Interpretation of notifications regarding rebate of excise duty on exported goods
The notification in question, issued in 1967 and subsequently amended, allowed for rebate of excise duty on mineral oil products exported for consumption on board foreign aircraft to specific countries with land frontiers in India. The absence of Nepal and Bhutan in the list of eligible countries supports the Commissioner's decision regarding the incorrect rebate claim. The applicant's argument regarding limitation for a part of the demand from March 1994 to November 1996, with a show cause notice issued in 1997, will be further examined for suppression of facts during the final hearing stage.

Issue 3: Barred by limitation claim for a part of the demand
Considering the circumstances, the Tribunal granted interim stay of the impugned order upon the applicant depositing Rs. 25,00,000 within eight weeks. Failure to deposit this amount would result in dismissal of the appeals. The pre-deposit of the remaining amount under the impugned order would be waived upon payment of the specified sum. The Tribunal directed the cases to be post for reporting compliance on 25-5-2006.

In conclusion, the Tribunal's detailed analysis of the issues raised by the applicant regarding the demand for duty, interpretation of rebate notifications, and limitation claim provides a comprehensive understanding of the legal considerations involved in the judgment.