2013 (11) TMI 1078 - AT - Central Excise

Applicability of SSI Exemption Notification No. 84/1944 OR Notification No.214/1986 Manufacturing of goods on job basis - Suppression and Misstatement of fact Held that - The distinguishing factor that the appellant is registered with Central Excise department and is supposed to know the law as is prevailing - The claim of Limitation is a mixed question of law and facts and the findings as regards whether there was an intention to evade duty or not, can be gone into only when the matter is being heard at the time of final disposal - the appellant was supposed to be aware of the law and having not followed the law, the question of limitation needs deeper consideration - the appellant has not made out a prim facie case for complete waiver of the amount of duty liability confirmed by the lower authorities - The issue needs deeper consideration and is of interpretation of Notification No.84/1994 - the appellant directed to deposit an amount of Rupees One Lakh as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
Non-discharge of duty on job-worked goods due to failure of principal raw material supplier to file a declaration under Notification No.84/1994-C.E.

Analysis:

Issue 1: Non-discharge of duty on job-worked goods
The appellant sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs.4,03,430/- imposed by lower authorities for not paying Central Excise duty on goods manufactured on job work basis. The counsel argued that the demand arose from an audit of records, where duty was calculated on job worked items due to the principal raw material supplier's failure to file a required declaration. The appellant claimed ignorance of duty payment requirement on job-worked goods. The Departmental Representative contended that as a registered Central Excise unit, the appellant should have known and complied with the law, including filing declarations. The Tribunal noted the invocation of Notification No.214/1986 in the show cause notice instead of the applicable Notification No.84/1994-C.E.

Issue 2: Interpretation of Notification No.84/1994-C.E.
The Tribunal analyzed Notification No.84/1994-C.E., which also mandates the principal raw material supplier to file a declaration for job-worked goods. Despite case laws indicating non-filing as a procedural issue, the Tribunal emphasized the appellant's registration with the Central Excise department, expecting awareness and compliance with prevailing laws. The Tribunal considered the limitation aspect as a mixed question of law and fact, requiring deeper scrutiny during final disposal. Noting the lack of a prima facie case for complete waiver, the Tribunal directed the appellant to deposit Rs.1 lakh within four weeks for further review based on compliance.

Conclusion:
The Tribunal acknowledged the complexity of interpreting Notification No.84/1994-C.E. and directed a partial deposit while staying recovery pending compliance verification. The judgment highlighted the appellant's duty awareness obligations as a registered entity and deferred a final decision on waiver until a detailed examination at the next hearing.