2009 (8) TMI 1051 - AT - Central Excise

Summary

Issues:
Demand of interest on delayed payment of duty on sugar & molasses during transfer of premises on lease.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore involved the issue of demanding interest of Rs 1,97,772 from the appellants, M/s. Hemavathy Sahakara Sakkare Karkhane Ltd., for delayed payment of duty on sugar & molasses during the transfer of their premises on lease to M/s. Sri Chamundeshwari Sugars Ltd. The impugned order had imposed this interest due to the delay in clearing the stock of sugar and molasses when the premises were leased out. The appellants argued that they were unable to clear the stock immediately due to regulations by the Directorate of Sugar, Ministry of Consumer Affairs, Food & Public Distribution. They contended that they had paid the duty as per Central Excise Rules upon clearance of the stock and that their registration with the Department was still active even after the transfer. The Tribunal noted that the appellants remained registered as an assessee and had fulfilled their duty liability as per the rules. Considering this, the Tribunal found that the appellants had presented a prima facie case against the interest demand and ordered a waiver of pre-deposit and a stay on the recovery of the interest amount until a final decision was reached in the appeal.

This judgment highlights the importance of compliance with Central Excise Rules in duty payment scenarios, even during premises transfers. It emphasizes the significance of maintaining registration with the Department and fulfilling duty liabilities promptly upon clearance of goods. The Tribunal's decision to grant a waiver of pre-deposit and stay on interest recovery showcases a balanced approach in considering the circumstances presented by the appellants and ensuring a fair process pending the appeal's final resolution.