2010 (12) TMI 1142 - AT - Central Excise

Summary

Issues Involved:
1. Amendment to the memorandum of appeal.
2. Waiver of pre-deposit and stay of recovery of adjudged dues.
3. Excisability of goods with 'Nil' rate of duty.
4. Quantum of duty payable on DTA clearances.

Summary:

1. Amendment to the Memorandum of Appeal:
The appellants sought an amendment to correct the erroneous amount of duty mentioned in the grounds of appeal from Rs. 64.14 crores to Rs. 24.46 lakhs. The Tribunal noted the lack of clarity in the amendment application and the absence of supporting affidavit, thus unable to entertain the application in its present form. The appellants were given liberty to take remedial steps.

2. Waiver of Pre-deposit and Stay of Recovery:
The appellants requested a waiver of pre-deposit and stay of recovery of adjudged dues totaling over Rs. 3.15 crores. They argued that similar demands for the period prior to 28-2-05 were dropped, leading them to believe bona fide that no duty was payable on DTA clearances post-28-2-05. They also cited financial hardships, supported by balance sheets and profit & loss accounts for the year ending 31-3-2009. The Tribunal, however, found no substantiation for the plea of financial hardships as the documents did not disclose the present financial position.

3. Excisability of Goods with 'Nil' Rate of Duty:
The appellants contended that fresh mushrooms were chargeable to 'Nil' rate of duty and thus not 'excisable' u/s 2(d) and Sec. 3 of the Central Excise Act. The Tribunal, referencing case law, held that goods with 'Nil' rate of duty are still 'excisable' within the meaning of Sec. 2(d) and Sec. 3 of the Act. The Tribunal noted that the appellant-unit was a running EOU during the material period, and their DTA clearances were covered by the proviso to Sec. 3(1) of the Act, making them liable to pay duty.

4. Quantum of Duty Payable on DTA Clearances:
The appellants had considered various options in their replies to the show-cause notices, indicating an inclination to pay duty of around Rs. 1.25 crores based on cum-duty value. The Tribunal directed the appellants to pre-deposit Rs. 1.25 crores within 4 weeks, in the absence of substantiated financial hardships.

Conclusion:
The Tribunal directed the appellants to pre-deposit Rs. 1.25 crores and report compliance by 7-2-2011. The plea of financial hardships was not substantiated, and the goods were deemed excisable despite a 'Nil' rate of duty. The amendment application was not entertained due to lack of clarity and supporting affidavit.