2012 (11) TMI 439 - AT - Central Excise

Waiver of pre-deposit manufacture of footwear - applicants were paying duty on the MRP of the footwear - benefit of Notification No. 5/2006-C.E. and cleared the goods on concessional rate of duty - alleged that the applicant has wrongly availed the benefit of Notification No. 5/2006-C.E. as the applicant has failed to fulfil the condition of the Notification Held that - Applicants are availing the benefit of Notification No. 5/2006 and as per the condition of the Notification, the retail sale price has to be indelibly marked or embossed on the footwear itself - applicants admitted that they are merely sticking a sticker showing MRP on the footwear - applicants had not made out a case for waiver of pre-deposit

Summary

Issues:
- Early hearing of stay applications
- Waiver of total demand of duty, interest, and penalties
- Interpretation of Notification No. 5/2006-C.E.

Early Hearing of Stay Applications:
The applicants filed applications for early hearing of stay applications, which were dismissed as infructuous since the stay applications were listed for hearing on the same day. The common issue in all applications was considered, and they were taken up together for consideration.

Waiver of Total Demand of Duty, Interest, and Penalties:
The applicants, engaged in the manufacture of footwear, sought waiver of a total demand of duty amounting to Rs. 7,00,000/-, interest, and penalties. The demand was confirmed due to part of the footwear production being cleared to industrial consumers, making it assessable to duty under Section 4 of the CEA. Additionally, the applicants were found to have wrongly availed the benefit of Notification No. 5/2006-C.E. for concessional duty rates. The applicants argued that they correctly paid duty based on the MRP marked on the footwear and that affixing stickers displaying the MRP entitled them to the Notification's benefits. However, the Revenue contended that the MRP had to be indelibly marked or embossed on the footwear itself to qualify for the Notification's benefits.

Interpretation of Notification No. 5/2006-C.E.:
The Tribunal found that the applicants were indeed availing the benefit of Notification No. 5/2006, which required the retail sale price to be indelibly marked or embossed on the footwear itself. Since the applicants admitted to only affixing stickers displaying the MRP, they did not fulfill the conditions of the Notification. Consequently, the Tribunal directed the applicant to deposit Rs. 2,00,000/- within four weeks. Upon this deposit, the remaining amount of duty, interest, and penalties was waived, and recovery of the same was stayed during the appeal's pendency. Compliance was required to be reported by a specified date.