2006 (11) TMI 533 - AT - Central Excise

Summary

Issues:
Stay applications against Commissioner's order regarding duty and penalty classification for sugar production under Essential Commodities Act.

Detailed Analysis:
1. Common Issue: The two stay applications were filed against the Commissioner's order regarding duty and penalty classification for sugar production under the Essential Commodities Act. The duty amounts and penalty involved in each appeal were specified, and both appeals were decided through a common order due to the common issue.

2. Facts of the Case: The appellants were sugar manufacturers falling under Chapter 17 of the Central Excise Tariff Act. The issue revolved around the classification of sugar under two sub-headings, 1701.31 and 1701.39, based on orders issued by the Central Government under Section 3(2)(f) of the Essential Commodities Act, 1955.

3. Orders and Compliance: The Central Government issued orders requiring sugar producers to sell a specified percentage of sugar to the government under the Levy Sugar Supply (Control) Order, 1979. Additionally, the Ministry of Food and Consumer Department issued an order requiring compliance with the levy sugar release order, with penalties for non-compliance under the Essential Commodities Act.

4. Contentions: The applicants argued that the sugar supplied under the Levy Sugar Supply (Control) Order should be considered as compliant with Section 3(2)(f) of the Essential Commodities Act. They maintained that any excess sugar release was adjusted in subsequent years and referred to official correspondence supporting their compliance with the orders.

5. Classification Dispute: The Commissioner denied the classification of excess sugar under Section 3(2)(f) due to it being supplied under the Levy Sugar Supply (Control) Order. However, the Tribunal found that all releases were under the same order, and the fixed percentage was under Section 3(2)(f). The Ministry's order also reinforced that all releases had to be considered under Section 3(2)(f).

6. Prima Facie Case: The Tribunal concluded that the applicants had a prima facie case in their favor. They waived the pre-deposit of duty and penalty, staying the recovery until the appeals' disposal. The decision was pronounced on 1-11-2006 by the Tribunal members.

This detailed analysis outlines the classification dispute, compliance with government orders, contentions raised by the parties, and the Tribunal's decision to waive the pre-deposit of duty and penalty pending appeal disposal.