2009 (5) TMI 637 - AT - Central Excise

Summary

Issues:
1. Disallowance of deductions claimed on sales tax, octroi, and discounts.
2. Discrepancy in the quantum of duty claimed by the appellant.
3. Prima facie view on waiver of entire demand.

Issue 1: Disallowance of deductions claimed on sales tax, octroi, and discounts:
The applicant, a manufacturer of surgical instruments, transfers goods to depots after stock transfer to a Central Stocking Point, leading to uncertainty in actual sales tax and octroi paid. The original authority confirmed a demand of Rs. 2,81,41,807/- along with interest and penalty. The applicant sought waiver of pre-deposit of these dues. The Consultant argued that deductions were disallowed based on average basis claims for sales tax and octroi, and discounts were passed on to customers through credit notes. The SDR contended that deductions were claimed in excess of actual payments, discounts were not disclosed before clearance, and evidence of discounts passed on was lacking. The Tribunal noted the importance of factual accuracy in deductions and highlighted the need for evidence and provisional assessment. Citing relevant case law, the Tribunal emphasized the requirement for proof of actual payments for deductions.

Issue 2: Discrepancy in the quantum of duty claimed by the appellant:
The Tribunal deferred detailed examination of the duty quantum discrepancy to the final hearing. Financial hardship was not pleaded, and the Tribunal found insufficient grounds for waiving the entire demand. The Tribunal directed the applicant to deposit 50% of the demanded duty within 8 weeks and report compliance, while waiving the pre-deposit of the remaining amount of duty, penalty, and interest until appeal disposal.

Issue 3: Prima facie view on waiver of entire demand:
The Tribunal's prima facie view was against waiving the entire demand due to lack of financial hardship and discrepancies in duty quantum claimed by the appellant. The decision to direct a partial deposit and waive the remaining amount was based on a comprehensive assessment of the case's facts and circumstances.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, New Delhi highlights the key issues of disallowed deductions, duty quantum discrepancy, and the Tribunal's view on the waiver of the entire demand, providing a thorough understanding of the case's legal intricacies and outcomes.