2013 (10) TMI 1041 - AT - Central Excise

Exemption claim on specially designed transformers which was avaialable - Exemption under Notification No.6//06 Waiver of Pre-deposit - Held that - The statement of Shri Balakrishnan that applicant in some cases claimed the benefit of exemption and in other cases, they have paid duty - Thus there is factual dispute on this issue which will be examined at the time of appeal hearing we are not impressed by the submission of learned consultant in respect of time-bar - It is not clear as to whether applicant has informed the department about availment of benefit of exemption and payment of duty in both the cases - We have also noticed the submission of Ld. counsel that since March 11 they are paying duty on all consignments of transformers the applicant failed to make out prima facie case for waiver of pre-deposit of entire amount of duty along with interest and penalty - the applicant is directed to deposit amount as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
- Whether the applicant wrongly availed exemption notification for clearing transformers to manufacturers of Wind Operated Electricity Generating Systems?
- Whether the demand of duty for the specified period is barred by limitation?
- Whether there was suppression of facts to evade payment of duty?
- Whether the applicant informed the department about availing exemption and paying duty?
- Whether the applicant made out a prima facie case for waiver of pre-deposit of the duty amount?

Analysis:

1. The applicant, engaged in manufacturing transformers under Chapter 85 of the Central Excise Tariff Act, 1985, cleared goods as Specially Designed Transformers to Wind Operated Electricity Generating Systems manufacturers, claiming exemption under Notification No.6/06-CE. Central Excise Officers found discrepancies in availing the exemption, leading to a demand of duty of Rs.97,88,868/- with interest and penalty for the period Feb 07 to March 11.

2. The consultant argued that the demand for duty during Feb 07 to April 11, as per a show cause notice dated 16.2.12, is time-barred and there was no intent to evade duty payment. He highlighted the reversal of credit for exempted goods and regular duty payment post the Central Excise Officers' visit in March 2011. Reference was made to a Tribunal case dismissing a similar appeal by Revenue.

3. The Assistant Commissioner contended that during the visit, it was found that the applicant had not cleared specially designed transformers, supported by a customer's statement. The AR emphasized the duty payment initiation post-March 2011 and distinguished the present notification from the case law cited by the applicant.

4. The Tribunal acknowledged a factual dispute on whether the applicant cleared specially designed transformers, with some cases claiming exemption and others paying duty. The Tribunal noted uncertainty regarding informing the department about exemption and duty payment instances. Despite duty payment post-March 2011, the applicant failed to establish a prima facie case for full pre-deposit waiver. A directive was issued to deposit Rs.20,00,000/- within 8 weeks, with the balance duty pre-deposit waived pending appeal, subject to compliance by a specified date.