2011 (12) TMI 458 - AT - Central Excise

Waiver of pre-deposit of duty - benefit of exemption notification No. 23/2004, dated 9-7-2004 and 5/2006, dated 1-3-2006 - notifications provide concessional rate of duty depending on the value of footwear subject to the condition that the rejected sale price is indelibly marked or embossed on the footwear - Held that - stickers are put on the rejected footwears after the completion of manufacture. We find that there is no allegation against the applicant that they have charged any higher price than the price put on the sticker on the rejected footwears. So far as the test report submitted by the applicant is concerned the Commissioner did not dispute the veracity of the said certificate and there is no allegation against the applicant that they have charged higher price than the price re-fixed on the rejected footwear. Thus we find that the applicants have substantially complied with the condition of the notification and the applicants have been able to make out a strong prima facie case in their favour and therefore the requirement of pre-deposit is waived and recovery thereof is stayed during pendency of the appeal. - Stay granted.

Summary

Issues: Application for waiver of pre-deposit of duty under exemption notifications.

Analysis:
1. The applicant sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 1,07,46,905 under exemption notifications No. 23/2004 and 5/2006. These notifications provide concessional duty rates based on certain conditions, including marking rejected sale prices on footwear indelibly.
2. The applicant argued that they comply with the notification by using stickers with revised prices on rejected footwear, which cannot be removed without damaging the substrate. They presented a test certificate supporting their claim. They emphasized that there were no allegations of selling goods at higher prices than those marked on the stickers.
3. The Revenue contended that the applicant did not use indelible ink for marking revised prices, thus failing to meet the notification's condition.
4. The Tribunal noted that stickers were affixed after manufacturing completion, but there was no evidence of charging higher prices than those on the stickers. The Commissioner did not dispute the test certificate's authenticity. Consequently, the Tribunal found substantial compliance with the notification's condition, citing previous Tribunal and Supreme Court decisions in support.
5. As the applicant demonstrated a strong prima facie case in their favor and showed substantial compliance with the notification, the Tribunal waived the pre-deposit requirement and stayed the recovery during the appeal's pendency. The stay petition was allowed, and the decision was pronounced in open court.