2011 (2) TMI 592 - AT - Central Excise

Application for stay - waiver of pre-deposit - It is seen that the above reproduced proviso came into effect from 1-5-2002. It is also seen that the said proviso very clearly indicate that once the entire amount of deferred payment of sales tax has been pre-maturely paid, such payments, in the public interest, are considered as in discharge of deferred balance Sales Tax, if any, on that day - Supreme Court in the case of Benara Valves Ltd. v. CCE - (2006 -TMI - 866 - SUPREME COURT OF INDIA)wherein it was held that while during the application for stay petition, such condition to be imposed which are deemed appropriate to safeguard the interest of the Revenue - Held that the appellant has made out a prima facie case for waiver of pre-deposit of duty, interest and penalty - Decided in favor of the assessee

Summary

Issues:
Stay application for waiver of pre-deposit of central excise duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:
The appellant filed a stay application seeking waiver of pre-deposit of central excise duty, interest, and penalty. The adjudicating authority confirmed the amount due, asserting the appellant's liability for differential duty due to availing benefits under the Maharashtra Sales Tax Act, 1959. The appellant argued that an amendment to the Bombay Sales Tax Act allowed discharge of the deferred sales tax liability, citing relevant circulars and case law. The Revenue contended that the deferred sales tax amount should be included in the transaction value, referring to Board Circulars and judgments of the Tribunal and Supreme Court. The Revenue emphasized that once an appeal is admitted by the Supreme Court, the judgment is in jeopardy, citing relevant case law.

The Tribunal noted that the disputed amount was sales tax collected by the appellant, to be paid to the Government of Maharashtra under a deferred payment scheme. An amendment to Section 38(4) of the Bombay Sales Tax Act allowed premature payment of deferred sales tax, deeming it paid in public interest. The Tribunal found that the appellant had a prima facie case, as the collected amount constituted sales tax, falling under the exclusion of transaction value as per Section 4. The Tribunal distinguished the facts from the case cited by the Revenue and highlighted the Supreme Court's directions in a relevant case for disposing of stay petitions. Considering previous decisions of Co-ordinate Benches in similar cases, the Tribunal concluded that the appellant established a prima facie case for waiving the pre-deposit amounts. Consequently, the application for waiver was allowed, and recovery stayed pending appeal.

In conclusion, the Tribunal granted the appellant's request for waiver of pre-deposit of duty, interest, and penalty, staying the recovery until the appeal's disposal. The judgment was pronounced on 21-2-2011.