2015 (2) TMI 1068 - AT - Central Excise

100% EOU - Benefit of Notification No. 8/1997-CE dt. 1/3/1997 - appellant could not bring any evidence to support his claim for benefit of Notification No. 8/1997 - Part duplication of demand - Held that - Applicant is not able to produce any evidence so as to indicate that the goods cleared in DTA were made from indigenously/domestically manufactured material alone. In the circumstances, they will not be eligible for the Notification No. 08/1997-CE dated 1/3/1997. We also note that the appellant has not able to answer the question that how part of the demand is duplicated in other show cause notice. We also note that as per the appeal memorandum even if benefit Notification No. 08/1997-CE dated 1/3/1997 is extended to them and their plea of duplication of demand is accepted even then appellant would have duty liability of ₹ 22,66,696/-. In addition they would have the interest liability which would also be in the same range or even more. Ld. Counsel for the appellant has pleaded financial hardship and submitted unit is sick and is before BIFR. - No prima facie case in favour of assessee - Partial stay granted.

Issues:
1. Eligibility for benefit of Notification No. 08/1997-CE dated 1/3/1997.
2. Part duplication of demand.
3. Evidence supporting the claim of goods cleared in DTA made from indigenous raw materials.
4. Financial hardship plea and directed deposit amount.

Eligibility for benefit of Notification No. 08/1997-CE dated 1/3/1997:
The Tribunal noted that the benefit of Notification No. 8/97 is applicable only to goods manufactured entirely from indigenous raw materials. The appellant claimed that goods exported were made from imported yarn, while those cleared domestically were from indigenous cotton yarn. However, the appellant failed to provide sufficient supporting evidence to substantiate this claim. Despite submitting a statement to the Development Commissioner, the records did not conclusively prove the origin of raw materials used in production. As a result, the appellant was deemed ineligible for the benefits under the said notification.

Part duplication of demand:
The Tribunal observed that the appellant could not explain how part of the demand was duplicated in another show cause notice. The duty demand in the present case pertained to yarn sent to a job worker, distinct from the fabric-related demand in the other notice. Additionally, the appellant's inability to clarify this aspect further weakened their case.

Evidence supporting indigenous raw materials claim:
The statement submitted by the appellant on 18/8/2000 indicated the use of imported material in the production of goods not exported, suggesting its utilization in domestically cleared products. The absence of concrete evidence or test reports regarding the nature of yarn used in DTA clearances undermined the appellant's position. The appellant's failure to produce documents verifying the origin and usage of raw materials contributed to the dismissal of their claim.

Financial hardship plea and directed deposit amount:
Considering the appellant's plea of financial hardship and their admission of a duty liability of nearly 23 lakhs, the Tribunal directed the appellant to deposit 20 lakhs within six weeks. This deposit would result in a stay on the recovery of the remaining duty, interest, and penalty amounts. The Tribunal acknowledged the appellant's prior deposit of 12 lakhs and emphasized the importance of compliance with the directed deposit to avoid further recovery actions.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the evaluation of eligibility for a specific notification, clarification on duplication of demand, the necessity of supporting evidence, and considerations related to financial circumstances and directed deposits.

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