2009 (11) TMI 748 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duty demand under Section 35F of the Central Excise Act, 1944.

Analysis:
1. The appellant, a manufacturer of Kraft paper and M.S. Ingots, faced duty demand, interest, and penalty due to alleged contravention of Rule 8(3A) of the Central Excise Rules, 2002. The Commissioner confirmed duty demand of Rs. 1,03,94,960/- along with interest and imposed a penalty of Rs. 5,000/-. The appellant was asked to pay the duty demand and interest in cash.

2. The appellant contended that there was no short payment of Education Cess, citing clerical errors and legal interpretations. They argued that Education Cess should be calculated based on duties collected by the Finance Ministry only. The appellant also claimed a clerical mistake in utilizing Cenvat credit for Education Cess payment.

3. The Department opposed the waiver, stating that the appellant failed to discharge full duty liability for Education Cess, triggering Rule 8(3A) implications. Citing legal precedents, the Department argued that duty should have been paid in cash during the default period, not through Cenvat credit.

4. The Tribunal found merit in the appellant's arguments. It noted a clerical mistake in Education Cess payment and excess payment in the paper division. Legal interpretations clarified that Education Cess should not include certain levies. The Tribunal considered these findings as prima facie evidence in favor of the appellant.

5. Consequently, the Tribunal waived the pre-deposit requirement for the duty demand, interest, and penalty. The recovery was stayed pending the appeal's disposal, indicating a prima facie case in favor of the appellant.

This detailed analysis outlines the issues, arguments, legal interpretations, and the Tribunal's decision regarding the waiver of pre-deposit of duty demand under the Central Excise Act, 1944.