2013 (4) TMI 594 - AT - Central Excise

Stay - job work - Principal was not having a manufacturing facility, power connection etc. - Notification No.214/86-CE dated 25.3.1986. - whether job worker is entitled to clear the job-worked goods without payment of duty - non compliance of order of pre-deposit issued by the Commissioner (appeals) - job work - Notification No.214/86-CE dated 25.3.1986. - held that - appellant was not entitled to clear the goods to ROL without payment of duty. - Further, we have taken note of one submission made by the learned counsel which is to the effect that the department has initiated proceedings against ROL. - In the totality of the facts and circumstances of the case, in our view, a pre-deposit of 25% of the duty amount would suffice the purpose of Section 35F of the Central Excise Act before the learned Commissioner. - Stay granted partly.

Summary

Issues involved:
1. Waiver of pre-deposit and stay of recovery sought by the appellant.
2. Dismissal of the appellant's appeal by the appellate Commissioner due to non-compliance with Section 35F of the Central Excise Act.
3. Dispute regarding duty demand and penalty imposed on the appellant for job work activities undertaken for M/s. Ravi Organics Ltd.

Analysis:

Issue 1: Waiver of pre-deposit and stay of recovery
The appellant filed an application seeking waiver of pre-deposit and stay of recovery in relation to a duty amount and penalty imposed. The Tribunal, after reviewing the records and hearing both sides, found the case suitable for remand subject to terms. The appellant contended that they were entitled to full waiver of pre-deposit based on their compliance with Notification No.214/86-CE. However, the Tribunal determined that a 25% pre-deposit of the duty amount within six weeks would suffice as per Section 35F of the Central Excise Act. The appellant was directed to comply with this requirement, and upon doing so, the Commissioner (Appeals) would proceed with the appeal without further deposit, ensuring a fair opportunity for the appellant to present their case.

Issue 2: Dismissal of appeal by appellate Commissioner
The appeal was filed against the appellate Commissioner's order, which dismissed the appellant's appeal due to non-compliance with Section 35F of the Central Excise Act. The original authority had demanded duty and penalty from the appellant for job work activities carried out for M/s. Ravi Organics Ltd. The appellant's appeal to the Commissioner (Appeals) was dismissed as they failed to make the required pre-deposit within the specified time frame. The Tribunal reviewed the submissions and found that the appellant did not present a strong enough case for full waiver of pre-deposit, ultimately directing a 25% pre-deposit.

Issue 3: Duty demand and penalty for job work activities
The dispute arose from the duty demand and penalty imposed on the appellant for job work undertaken for M/s. Ravi Organics Ltd. Initially, Ravi Organics Ltd. had given an undertaking to the department for manufacturing structural items, based on which the appellant conducted job work. However, Ravi Organics Ltd. later stated that they did not have manufacturing facilities and cleared most goods to SEZ units. The department issued a show-cause notice to the appellant for duty recovery on goods supplied to Ravi Organics Ltd. The appellant contested the demand, citing compliance with Notification No.214/86-CE. Despite the appellant's arguments, the original authority confirmed the duty demand and penalty, leading to the appeal process and subsequent directions by the Tribunal regarding pre-deposit and remand of the case.

In conclusion, the Tribunal set aside the impugned order, allowed the appeal by way of remand on specified terms, and disposed of the stay application. The detailed analysis of each issue involved in the judgment provides a comprehensive understanding of the legal proceedings and the Tribunal's decision-making process.