2007 (5) TMI 516 - AT - Central Excise

Summary

Issues:
1. Application for waiver of pre-deposit of duty and penalty.
2. Duty demand on sugar syrup used in the manufacture of aerated water and Fruit Pulp Based Beverage.
3. Benefit of exemptions under various notifications.
4. Marketability of sugar syrup and its solid content.

Analysis:
1. The judgment dealt with the application for waiver of pre-deposit of duty amounting to Rs. 54,97,427/- and penalty of Rs. 15,00,00/-. The duty demand was confirmed on sugar syrup utilized in the production of aerated water and Fruit Pulp Based Beverage known as Mangola.

2. Nine show cause notices were issued covering the period from January 1995 to May 1997. The demand raised on sugar syrup used in aerated water was contested by the applicants, claiming the benefit of exemptions under Notification No. 217/86-CE and Notification No. 67/95. The Tribunal acknowledged the prima facie validity of these contentions, providing relief under the said notifications. Additionally, the benefit of Notification No. 10/96-C.E. was recognized for sugar syrup used in the manufacture of Mangola.

3. The applicants argued that the sugar syrup in question was not marketable due to its short shelf life and low solid content, which was supported by a Board's Circular and a previous case reference. The Tribunal found merit in this argument, concluding that the item in question may not be excisable. Moreover, it upheld the availability of exemptions under Notification No. 67/95 and Notification No. 10/96 post-July 23, 1996, thereby establishing a strong prima facie case for waiver on merits.

4. In light of the submissions and evidence presented, the Tribunal granted a stay on the recovery of the duty and penalty pending the appeal, recognizing the prima facie validity of the applicants' claims regarding the marketability of the sugar syrup and the applicability of relevant exemptions under the notifications cited.

This detailed analysis of the judgment highlights the issues addressed, the arguments presented by the parties, and the Tribunal's findings regarding the waiver of duty and penalty in the case concerning the duty demand on sugar syrup used in the production of aerated water and Fruit Pulp Based Beverage.