2009 (6) TMI 770 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of Central Excise duty amount.
2. Interpretation of Central Excise Rules regarding default in payment and forfeiture of monthly payment facility.

Analysis:
1. The applicants filed for waiver of pre-deposit of Rs. 2,32,35,580, which was the amount in default for Central Excise duty during February and March 2005. The Revenue claimed that the applicants violated Sub-rule 3A of Rule 8 of the Central Excise Rules, 2002 by clearing goods in September 2006 using Cenvat credit instead of paying the duty from the current account. The contention was whether the duty should have been paid along with interest as per the rules in force during the default period or as per the amended rules effective from April 1, 2005, which introduced the provision for forfeiture of monthly payment facility in case of default.

2. The applicants argued that since there was no specific order by the Assistant Commissioner or Deputy Commissioner regarding the forfeiture of the monthly payment facility for the default period of February and March 2005, the demand was not sustainable. They relied on the decision in the case of M/s Noble Drugs Ltd. v. Commr. of Central Excise, Nasik - 2007 (215) E.L.T. 500 (Tri.-L.B.) to support their stance. The Tribunal found that during the default period, there was no provision for forfeiture of the monthly payment facility, and the duty along with interest had been paid by the applicants. Therefore, the Tribunal held that prima facie the applicants had a strong case, waived the pre-deposit of duty for the appeal hearing, and stayed the recovery of the same, allowing all stay petitions.

This judgment clarifies the application of Central Excise Rules concerning default in payment of duty and the forfeiture of monthly payment facility. It emphasizes the importance of adherence to the rules in force during the default period and provides relief to the applicants based on the absence of specific orders regarding forfeiture during the default period. The decision showcases the significance of legal provisions and their interpretation in determining the liability of duty payment in excise matters.