2008 (5) TMI 528 - AT - Central Excise

Summary

Issues:
Demand of additional duty of excise on Cotton Yarn in Cross Reel Hanks exempted from basic excise duty.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Kolkata, dealt with the demand of additional duty of excise on Cotton Yarn in Cross Reel Hanks, which were claimed to be exempted from basic excise duty for the period September 1998 to July 2004. The demand was made under four show-cause notices. The advocate for the appellants argued that since the impugned goods were exempted from basic excise duty, the additional duty of excise on textile and textile articles, levied at 15% of the basic excise duty, should be zero. It was further stated that for other Cotton Yarn not exempted from basic excise duty, the appellants had paid the additional duty at the prescribed rate and those goods were not part of the current appeal.

The Tribunal heard both sides, with the Joint Commissioner of Central Excise supporting the impugned order. The Tribunal considered Section 3(1) of the Additional Duties of Excise (Textile and Textiles Articles) Act, 1978, which imposes a levy of additional duty at 15% of the duty of excise chargeable on specified goods. Given that the basic excise duty assessed on the impugned goods was nil due to exemption, the appellants had a prima facie case for total waiver of the pre-deposit during the appeal's pendency. Consequently, the Tribunal waived the pre-deposit requirement and allowed both parties to seek an early hearing due to the significant amount involved in the case, exceeding Rs. 1 Crore.

In conclusion, the judgment provided relief to the appellants by waiving the pre-deposit requirement based on the exemption from basic excise duty on the impugned goods. The decision was made in accordance with the provisions of the relevant legislation and aimed to ensure fairness and procedural efficiency in the appeal process.