2008 (11) TMI 551 - AT - Central Excise

Summary

Issues:
1. Application for raising a legal issue.
2. Application for waiver of pre-deposit of duty and penalty.
3. Preliminary objection regarding ordering a special audit.

Analysis:

Issue 1: Application for raising a legal issue
The applicant filed an application to raise a legal issue, which was allowed by the Tribunal. This indicates that the Tribunal acknowledged the applicant's right to raise a legal issue for consideration.

Issue 2: Application for waiver of pre-deposit of duty and penalty
The applicant filed an application for waiver of pre-deposit of duty amounting to Rs. 88,01,139/- and an equal amount of penalty. The demand was confirmed due to the alleged excess credit availed by the applicant in relation to inputs not utilized in the final production of excisable goods. The Revenue ordered a special cost audit, and the Tribunal noted conflicting opinions from the Cost Accountant regarding the utilization of inputs. The Tribunal found that there was no concrete evidence to support the denial of credit for the inputs in question. Consequently, the Tribunal considered it a fit case for the waiver of pre-deposit of duty and penalty, and the Stay Petition was allowed unconditionally.

Issue 3: Preliminary objection regarding ordering a special audit
The applicant raised a preliminary objection concerning the ordering of a special audit. The objection was based on the provisions of Section 14AA of the Central Excise Act, which outlines the conditions under which a special audit can be ordered. The applicant contended that the Commissioner of Central Excise did not comply with the conditions of the Section while ordering the special audit in this case. The Tribunal considered the arguments presented by both sides and found that there was insufficient evidence to support the Commissioner's decision to order a special audit. The Tribunal noted discrepancies in the weight of bags produced and the utilization of inputs, ultimately leading to the decision that it was not a case necessitating pre-deposit.

In conclusion, the Tribunal allowed the application for raising a legal issue, considered the application for waiver of pre-deposit of duty and penalty in light of conflicting opinions and lack of evidence, and addressed the preliminary objection regarding the ordering of a special audit by emphasizing the importance of complying with statutory provisions.