2015 (3) TMI 1090 - AT - Central Excise

Waiver of pre deposit - Benefit of area based exemption notification - non-inclusion of their Khasra Nos. in Notification No.50/03-CE - Held that - As regards the claim under Notification NO.50/03-CE though the goods being manufactured by the appellant are not in the negative list of Annexure I to the notification No.50/03-CE there is no dispute that the khasra no. of the plot of land on which the factory is located are not the notified in the annexure II of the notification and hence this exemption notification would not be applicable. It is seen that the appellant have filed a writ petition before the Hon ble High Court of Uttarakhand against the government decision for non-inclusion of their Khasra No. in the Notification and the High Court while admitting their writ petition had directed the pre-deposit the duty payable on the goods for the period prior to October 2010. In view of this we direct the appellant company to deposit the duty amount confirmed within twelve weeks from the date of this order. On deposit of this amount within the stipulated period the requirement of pre-deposit of interest and penalty would stand waived and recovery thereof stayed - Partial stay granted.

Summary

Issues:
1. Eligibility for duty exemption under Notification No.49/03-CE.
2. Eligibility for duty exemption under Notification No.50/03-CE.

Analysis:
1. The appellant claimed duty exemption under Notification No.49/03-CE, stating an expansion of their installed capacity by over 25% after 7.1.03. The Notification exempts specified industries from central excise duty. The Commissioner denied the exemption, leading to a duty demand of Rs. 2,83,22,471, interest, and penalties. The appellant argued they are covered by the exemption as a non-timber product industry. However, the Tribunal found the goods manufactured, plywood, block board, flush doors, are timber-based, not falling under non-timber forest produce, thus upholding the Commissioner's decision.

2. Regarding the claim under Notification No.50/03-CE, the appellant's manufacturing unit's location Khasra Nos. were not included in the notification. The appellant filed a writ petition against this non-inclusion. The Tribunal noted that while the goods were not on the negative list of the notification, the exemption did not apply due to the unlisted Khasra Nos. The High Court directed pre-deposit of duty before October 2010. The Tribunal ordered the appellant to deposit the confirmed duty amount within twelve weeks, waiving pre-deposit of interest and penalty upon compliance. The penalty pre-deposit by the Managing Director was waived for the appeal hearing, with its recovery stayed.