2010 (7) TMI 348 - AT - Central Excise

Waiver of pre-deposit Refund under area based exemption Excess payment of duty - sales were on FOR destination basis that is during the transit from the factory to the customer s premises the ownership remained with the appellant - liable for any damage to the goods or loss of the goods during transit and that the expenses of transport and insurance from the factory gate to the customer - no point of time, that the appellant had specifically intimated to the Department that they are paying duty on price which includes the expenses of transport and insurance up to the customer s premises and in the ER-1 returns filed by them, this fact had not been disclosed - not the case for total waiver from the requirement of pre-deposit Part pre-deposit waived

Summary

Issues:
Application for waiver from pre-deposit of duty demand, interest, and penalty under Central Excise Act, 1944.

Analysis:
The case involved an application for waiver from the requirement of pre-deposit of duty demand, interest, and penalty under the Central Excise Act, 1944. The appellant, engaged in manufacturing various goods chargeable to Central Excise Duty, availed duty exemption under Notification No. 56/02-C.E. However, during an audit, it was discovered that the appellant had paid duty on the assessable value, including freight and insurance expenses up to the customer's premises, while sales were made at the factory gate. This resulted in an excess excise duty payment of Rs. 10,39,166/-. A show cause notice was issued for recovery of the amount along with interest and penalty, which was confirmed by the Additional Commissioner and upheld by the Commissioner (Appeals). The appellant contended that they correctly paid duty and were eligible for refund under the notification, emphasizing the revenue-neutral nature of the case. The Department argued that the duty was paid on an inflated assessable value, not actually payable, citing relevant case law. The Tribunal noted the eligibility for exemption under the notification, emphasizing duty payment through PLA for refund. The appellant failed to prove sales on FOR destination basis, leading to a finding that duty paid was in excess of what was correctly payable. The Tribunal directed the appellant to pay Rs. 8,00,000 within eight weeks, with further pre-deposit waiver subject to compliance.

This detailed analysis covers the issues involved in the judgment, including the application for waiver from pre-deposit of duty demand, interest, and penalty under the Central Excise Act, 1944. The Tribunal's decision was based on a thorough examination of the facts, legal provisions, and arguments presented by both parties.