2010 (5) TMI 558 - AT - Central Excise

Waiver of pre-deposit - Notification No 4/06 as amended by 4/08 dated 11-3-2008 - It is undisputed that the appellant is eligible for the benefit of the said notification No 4/06 and 4/08 - Only reason for confirmation of demand is that during the intermediate period, i.e. before the entire quantity of 3500 Mts cleared from the factory premises they discharged duty on specific consignments - appellant has made out a prima facie case for the waiver of pre-deposit of the amounts involved - Accordingly decided in the favour of the assessee

Summary

Issues:
1. Duty liability on clearances under exemption Notification No. 4/06 as amended by 4/08.

Analysis:
The case involved a dispute regarding the duty liability on clearances made by the appellant under the benefit of exemption Notification No. 4/06 as amended by 4/08. The appellant had availed the benefit of the notification for the first clearances of 3500 Metric Tonnes of paper without payment of duty. However, due to customer requirements, they had to clear additional quantities on payment of duty before exhausting the duty-free quota. The revenue contended that once duty was paid on intermediate consignments, the duty liability applied to the entire clearances from the beginning. The Tribunal examined the provisions of the notification, specifically condition No. 10, which stated that the exemption applied up to the first clearances of an aggregate quantity not exceeding 3500 Metric Tonnes. The Tribunal found that the wording of the notification did not impose any restrictions based on partial duty payments during the clearance process. Therefore, the Tribunal concluded that the appellant had a prima facie case for the waiver of pre-deposit of the amounts involved and allowed the application for waiver, staying the recovery until the appeal's disposal.

This judgment clarified the interpretation of the exemption notification and highlighted that the duty liability was not linked to partial duty payments on specific consignments during the clearance process. The Tribunal emphasized that the notification did not impose any restrictions based on when duty was paid within the overall quantity limit. The decision provided clarity on the application of exemption notifications in cases where duty payments were made on certain consignments before exhausting the duty-free quota specified in the notification.

In conclusion, the Tribunal's decision favored the appellant by allowing the waiver of pre-deposit of the duty amounts involved. The judgment underscored that the wording of the exemption notification did not support the revenue's argument that duty liability extended to the entire clearances once duty was paid on intermediate consignments. The analysis provided a detailed examination of the notification's conditions and their application to the appellant's case, ensuring a fair interpretation of the legal provisions governing duty liability on clearances under the exemption notification.