2013 (10) TMI 495 - AT - Central Excise

Waiver of Pre-deposit - collection of incentives from the customer - whether an amount collected in the name of duty of excise - the amount to be credited to the Government account under rule 9(2) of the erstwhile Central Excise Rules, 1944 read with Section 11A and Section 11D of the Central Excise Act Held that - Following Kisan Sahkari Chini Mills Ltd. Vs CCE Meerut 2005 (3) TMI 116 - SUPREME COURT OF INDIA - They have cleared entire quantity of sugar during the material period as the additional entitlement under the incentive scheme at a concessional rate of duty vide notification No.130/83-ST - applicant mentioned duty @ Rs.17/- per quintal in their Central Excise Gate Passes - during the material period 1.10.91 to 31.3.92 the incentive amount was mentioned separately as incentive in the commercial invoices - Subsequently the incentive amount was added to the value of sugar in the commercial invoice - there is not a single evidence that they have collected incentive amount as duty in any document and therefore Section 11D cannot be invoked - applicant has made out a prima facie case for waiver of pre-deposit of entire amount duty Stay granted.

Summary

Issues:
1. Application for early hearing of appeal dismissed.
2. Dispute over duty payment on sugar production under an incentive scheme.
3. Interpretation of evidence regarding collection of incentive as duty.
4. Application of relevant legal provisions and previous judgments.
5. Decision on waiver of predeposit of duty and stay of recovery.

Analysis:
1. The Revenue filed an application for early hearing of appeal, which was dismissed as infructuous due to the stay petition being taken up simultaneously.
2. The applicant, engaged in sugar manufacturing, cleared goods at a concessional rate of duty under Notification No.130/83-CE and 131/83-CE. The Commissioner demanded Rs.1,49,99,292/- alleging that the applicant collected incentive as duty during a specific period. The applicant disputed this claim, citing compliance with the incentive scheme and the absence of evidence showing incentive collection as duty.
3. The applicant's advocate argued that the duty was paid at the prescribed rate, and the incentive amount was used for loan repayment, not collected as duty. They relied on a Tribunal decision in a similar case to support their position.
4. The Revenue contended that the applicant admitted to collecting the amount as per the incentive scheme before the High Court, citing an adjudicating authority's observation and a Supreme Court judgment in a related matter.
5. After considering both sides, the Tribunal found no evidence of the applicant collecting incentive as duty. Citing the Tribunal's decision in a similar case and the scheme's provisions, the Tribunal concluded that the applicant had a prima facie case for waiver of predeposit of duty. Consequently, the Tribunal waived the predeposit requirement and stayed the duty recovery pending appeal.