2007 (3) TMI 441 - AT - Central Excise

Summary

Issues involved: Waiver of pre-deposit of duty, inadmissible credit, paper transactions to defraud revenue, duty liability admission, penalty imposition, false duty payment certificate, compliance with directions.

Analysis:
1. Waiver of pre-deposit of duty: The appellants sought waiver of pre-deposit of duty amounting to Rs. 35,44,638 confirmed against them. The tribunal noted that the duty liability was admitted by the applicants, who claimed to have received and exported goods, even though the revenue alleged inadmissible credit through paper transactions to defraud. The tribunal considered the offer to withdraw rebate claim persuasive for waiving pre-deposit of duty.

2. Penalty imposition: Apart from the duty liability, penalties of equal amount were imposed on the applicants and power of attorney holders. The tribunal found a clear finding by the authorities that the duty payment certificate was false and bogus. Consequently, the tribunal held that no prima facie case for total waiver of penalty was made out. A direction was given for pre-deposit of Rs. 5 lakhs towards penalty within eight weeks, failing which the stay on recovery would be vacated, and appeals dismissed without prior notice.

3. Compliance with directions: The tribunal directed the applicants to categorically withdraw the rebate claim and report such withdrawal on the specified date for compliance. Failure to comply with the directions would result in vacation of stay and dismissal of appeals. The compliance report was required by a specific date to ensure adherence to the tribunal's orders.

This judgment by the Appellate Tribunal CESTAT, Mumbai, highlighted the importance of compliance with directions, the implications of false documentation on duty liability and penalties, and the significance of offers to withdraw rebate claims in seeking waiver of pre-deposit of duty. The decision provided a detailed analysis of the case, balancing the interests of the revenue and the applicants while ensuring adherence to legal procedures and requirements.