2012 (11) TMI 379 - AT - Central Excise

Waiver of pre-deposit of duty,interest and Penalty - Following the decion of court in case of VXL Instruments Pvt. Ltd. vs. CC, Bangalore 2005 (2) TMI 646 - CESTAT, BANGALORE Held that - the benefit of the Notification No.2/95-CE, is available in respect of the goods cleared to DTA which belongs to the same class. The similar goods means which are similar or which belong to the same class of the goods exported. In the present case as the applicant exported ceramic colours and also cleared ceramic colours in diluted form to DTA - No merit in contention of the applicant - pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal - stay petition is allowed.

Summary

Issues:
Waiver of pre-deposit of duty, interpretation of Notification No.23/03-CE, similarity of goods cleared to DTA with exported goods.

Analysis:
The applicant sought waiver of pre-deposit of duty amounting to Rs. 1,37,25,726/-, interest, and penalties after the demand was confirmed due to the denial of the benefit of Notification No.23/03-CE for goods cleared to DTA. The applicant, a 100% EOU engaged in manufacturing ceramic colours, contended that the goods exported were in concentrated form, while those cleared to DTA were in diluted form at a lower value. The applicant argued that the benefit of the Notification should apply as the goods cleared to DTA were similar to the exported goods, citing past notifications and tribunal decisions supporting their interpretation.

The Revenue, however, contended that the goods cleared to DTA, being in diluted form and of lower value, could not be considered similar to the exported goods. They argued that similarity meant having like characteristics and component materials enabling them to perform the same functions and be commercially interchangeable, which, in this case, was not met due to the diluted nature of the goods cleared to DTA.

The Tribunal analyzed the situation and found that the applicant had indeed cleared diluted ceramic colours to DTA while exporting concentrated ceramic colours. The key issue was whether 'similar' in the Notification should be equated to 'identical.' The Tribunal referred to a past circular interpreting a similar provision where 'identical' was clarified to mean similar or belonging to the same class. In the present case, the term 'similar' was used, indicating goods that are alike or belong to the same class as the exported goods. Given that the applicant exported and cleared ceramic colours in both concentrated and diluted forms, the Tribunal found merit in the applicant's contention. Consequently, the pre-deposit of dues was waived, and recovery was stayed during the appeal's pendency, granting relief to the applicant.