2012 (4) TMI 702 - AT - Central Excise

Summary

Issues involved: Application for waiver of pre-deposit of duty, interest, and penalty u/s Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998.

Waiver of pre-deposit of duty:
The applicants filed an application for waiver of pre-deposit of duty amounting to Rs. 12 lakhs, interest, and penalty, as demanded under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. The demand was based on the Commissioner of Central Excise's determination that the duty had not been paid in relation to the Hot Air Stenter.

Validity of the Rules:
The applicants contended that the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 were ultra vires, citing the decision of the Hon'ble Madras High Court in the case of Beauty Dyers v. UOI. However, the Madras High Court clarified that manufacturers are still liable to pay excise duty under Section 3 of the Act or other relevant provisions.

Precedent and Tribunal Decision:
Relying on the Tribunal's decision in Shanti Synthetics & Processors Pvt. Ltd. v. CCE, Thane.-I, where a similar demand was set aside following the Madras High Court's ruling, the applicants sought relief. The issue was considered settled by the Madras High Court's decision in the Beauty Dyers case, leading to the waiver of pre-deposit for the appeal hearing.

Decision and Remand:
Given that the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 were deemed ultra vires by the Madras High Court in the Beauty Dyers case, the demand in the impugned order was set aside. The appellants were directed to pay excise duty u/s Sec. 3 of the Act or other applicable provisions as per the Madras High Court's decision. The matter was remanded to the adjudicating authority for a fresh decision, with the appellants granted a personal hearing opportunity.

Disposition:
The appeal was disposed of in accordance with the above terms, reflecting the reliance on legal precedents and the specific ruling of the Madras High Court in the Beauty Dyers case.