2009 (1) TMI 658 - AT - Central Excise

Summary

The Appellate Tribunal CESTAT, MUMBAI, in the 2009 case of 1 TMI 658, heard an appeal concerning a demand for duty exceeding Rs. 49 lakhs from the appellants for the period March 2003 to March 2007. The dispute arose from the manufacture and clearance of Paper Board without payment of duty, under Sub-Heading 4802.20 of the Central Excise Tariff Schedule. The ld. Commissioner imposed penalties under Section 11AC of the Central Excise Act. The tribunal found that the appellants failed to fulfill mandatory conditions specified under the tariff entry, including the requirement of a certificate from the Khadi and Village Industries Commission (KVIC) certifying the goods as hand-made paper or board. The appellants were therefore not entitled to the 'nil' rate of duty. Additionally, the tribunal directed the appellants to pre-deposit the entire duty amount within four weeks, with a waiver of pre-deposit and a stay on penalty recovery until the appeals were disposed of. Compliance was to be reported by 24-2-2009. The judgment was delivered by S/Shri P.G. Chacko and K.K. Agarwal, with representation by Shri R. Nambirajan for the Appellant and Shri S.M. Vaidya for the Respondent. The order was per P.G. Chacko, Member (J). The tribunal also noted that the appellants' RT-12 and ER-1 returns did not disclose crucial information regarding the manufacturing process of paper, which was essential for claiming the duty classification under Sub-Heading 4802.20. The finding of suppression of facts in the impugned order was considered reasonable by the tribunal. Financial hardships were not pleaded by the appellants, leading to the directive for pre-deposit of the duty amount. The judgment was dictated in court.