2004 (7) TMI 683 - AT - Central Excise

Summary

Issues:
1. Application under Section 35F of the Central Excise Act, 1944 for dispensing with pre-deposit order and granting stay of operation of the impugned order.
2. Eligibility for exemption under Notification No. 35/95-CE for manufacturing doubled yarns.
3. Contravention of Rules 173B, 173C, 173F, Rule 9(1) read with Rule 173G of CER 1944.
4. Confirmation of duty demand and penalty reduction by Commissioner of Central Excise (Appeals).
5. Settlement of the issue and direction for pre-deposit by the Appellate Tribunal.

Analysis:

1. The appellant filed an application under Section 35F of the Central Excise Act, 1944 seeking to dispense with the pre-deposit order of confirmed duty and penalty under Sections 11A and 11AB, and to stay the operation of the Order-in-Appeal. The appellant requested waiver of further recovery pending the appeal's disposal.

2. The issue revolved around the eligibility of the assessee for exemption under Notification No. 35/95-CE for manufacturing doubled yarns. The appellant contended that the amended notification excluded doubled yarn from the exemption only if cleared from a factory with the facility for single yarn production, which they argued did not apply in their case.

3. The assessee was found to have contravened various rules, including Rules 173B, 173C, 173F, Rule 9(1) read with Rule 173G of CER 1944, by failing to file required declarations. This led to the issuance of four Show Cause Notices demanding duty payment.

4. Following due enquiry, the Dy. Commissioner and the Commissioner of Central Excise (Appeals) confirmed the duty demand, with a reduction in the penalty amount. The duty demand was related to the non-payment of Central Excise duty amounting to &8377; 4,05,621/- due to the manufacturing and clearance of different types of doubled yarns.

5. The Appellate Tribunal reviewed the records and noted a settlement on the issue. Considering that a significant portion of the duty demand was attributable to credit on single yarn, the Tribunal directed the assessee to pre-deposit a specific amount, with further deposit waived upon compliance. The recovery was stayed accordingly, and the application was disposed of.

This detailed analysis covers the issues raised in the legal judgment, providing insights into the arguments presented, the findings of the authorities, and the final decision of the Appellate Tribunal regarding the pre-deposit and stay of recovery.