2011 (1) TMI 490 - AT - Central Excise

Application of stay - penalty under Rule 25 and 26 of the Central Excise Rules, 2002 - Differential duty - Notification No. 4/2006-C.E., dated 1-3-2006 - The only dispute sought to be raised is in relation to the duty amount, that is, whether it would be Rs. 350/- per tonne or Rs. 400/- per tonne - the clearance of the product is not on retail basis and in terms of the agreement between the parties, there is no requirement of printing of MRP on the packages in which the product is packed - Held that the claim of the applicant cannot fall under clause 1A of the Notification nor under 1B but has to fall under 1C of the said Notification - Decided against the assessee

Summary

Issues:
Applicability of concessional rate of duty on Cement under Sl. No. 1A of Notification No. 4/2006-C.E., dated 1-3-2006.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Bangalore arose from an order passed by the Commissioner (Appeals), Guntur, which set aside the penalty under Rule 25 and 26 of the Central Excise Rules, 2002 but upheld the direction to pay a differential duty amount. The appellants, manufacturers of Cement and Cement Clinker, were found to have paid Central Excise Duty at a lower rate than required, leading to a demand for the differential amount. The main issue for consideration was the applicability of the concessional rate of duty on Cement under Sl. No. 1A of Notification No. 4/2006-C.E., dated 1-3-2006 for the period March 2007 to February 2008.

The appellants argued that they were entitled to the concessional rate under the said Notification based on certain decisions. However, the Joint CDR contended that a different notification applied for the relevant period, specifying the duty rate based on the retail sale price. It was established that the appellants cleared the goods on a tonne basis, not as retail sales, which affected the applicable duty rate. The Tribunal noted that the Karnataka High Court decision cited by the appellants did not apply to the specific provision in question, leading to the dismissal of the appeal and stay application.

The authorities below had found that the appellants did not qualify for the concessional rate under clause 1A of the Notification due to the nature of their transactions and the absence of retail packaging requirements. As the findings were not disputed and no evidence contradicted them, the Tribunal upheld the duty demand at the higher rate. The Tribunal concluded that the appellants were liable to pay duty at Rs. 400 per tonne instead of the Rs. 350 per tonne they had paid, leading to the dismissal of the appeal and stay application.

In summary, the Tribunal upheld the duty demand at the higher rate of Rs. 400 per tonne, ruling against the appellants' claim for the concessional rate under clause 1A of the Notification. The decision emphasized the importance of transaction details and packaging requirements in determining the applicable duty rate, ultimately leading to the dismissal of the appeal and stay application.