2006 (7) TMI 493 - AT - Central Excise

Stay/Dispensation of pre-deposit - Exemption under Notification No. 4/97-C.E. - Demand - Limitation - Suppression

Summary

Issues:
1. Prayer to dispense with pre-deposit of duty amount and personal penalty.
2. Denial of benefit of Notification No. 4/97-C.E. to the appellant.
3. Receipt of Show Cause Notice and representation before the Original Adjudicating Authority.
4. Contention on duty paid character of raw material and burden of proof.
5. Appellant's entitlement to exemption notification and conditions satisfaction.
6. Onus of proving entitlement to exemption notification.
7. Bar of limitation for demand due to delayed Show Cause Notice.
8. Financial position of the appellants and factory situation.
9. Direction for deposit amount and dispensation of pre-deposit condition.

Analysis:
1. The appellant sought to dispense with pre-deposit of duty and penalty. The duty was confirmed against the appellant due to the denial of benefit under Notification No. 4/97-C.E. for the clearance of dyed yarn. The appellant's plea of not receiving the Show Cause Notice was contested, as the notice was sent via Registered Post and acknowledged by the firm's director. The Revenue's claim of pasting the notice at the registered address was also considered, leading to no prima facie merit in the appellant's contention.

2. The appellant argued that the duty paid character of raw material was not proven, shifting the burden to the Revenue. However, the onus to show entitlement to the exemption notification lies with the appellant. The appellant failed to satisfy the conditions of the notification, and reliance on specific case laws was deemed inapplicable to the present case by the Revenue.

3. The appellant's claim of limitation bar due to delayed Show Cause Notice was dismissed. Merely claiming the notification in the classification list was insufficient to prove continuous satisfaction of conditions. The continuous liability on the appellant to demonstrate duty paid raw materials was emphasized, diminishing the merit of the appellant's submissions on this point.

4. The appellant's financial instability due to the factory being taken by GIDC was considered. Despite this, the Tribunal directed the appellants to deposit a specified amount within a given period. Upon compliance, the pre-deposit condition for the remaining duty amount and penalty was dispensed with, taking into account the overall circumstances of the case.