2013 (11) TMI 1119 - AT - Central Excise

Benefit of exemption Notification No.4/2006 Held that - The Board s circular is related to the availment of unconditional exemption notification No. 20/2004 - Section 5A(1A) of Central Excise Act would apply where an exemption from payment of duty of excise under sub-Section (1) of Section 5A has been granted absolutely - both the serial number provides different conditions - the exemption under Serial No. 90 of the Table Appended to the Notification has not been granted absolutely Relying upon M/s. Akshera Papers Versus CCE, Salem 2013 (11) TMI 1014 - CESTAT CHENNAI - Prima facie, the findings of the Commissioner are not sustainable - the applicant has made out a prima facie case for waiver of the entire amount of duty, interest and penalty - Pre-deposit of the entire amount of duty, interest and penalty waived till the disposal Stay granted.

Summary

Issues:
Interpretation of Notification No.4/2006-CE regarding duty exemption for kraft paper manufacturing.

Analysis:
The judgment by the Appellate Tribunal CESTAT Chennai involved the interpretation of Notification No.4/2006-CE concerning the duty exemption for a manufacturer engaged in the production of kraft paper. The dispute arose when the Revenue claimed that the manufacturer should avail nil rate of duty up to 3500 Metric Tonnes (MTs) as per Serial No. 90 of the Table in the said Notification, leading to a demand for duty, interest, and penalty amounting to Rs.1,10,31,306/-. The Tribunal considered the issue in light of a previous case involving M/s. Akshera Papers where unconditional stay was granted, emphasizing the conditions specified under Serial No. 90 and 91 of the Notification.

Upon examining the Notification, it was noted that Serial No. 90 and 91 imposed distinct conditions. The adjudicating authority contended that there was no condition applicable up to the first clearance of 3500 MTs of kraft paper under Serial No. 90, requiring compliance with that serial number. The Revenue referred to the Board's Circular, highlighting the conditions for exemption under different serial numbers. The Tribunal observed that the exemption under Serial No. 90 was not granted absolutely, as it had specific conditions outlined in Condition No. 10 & 11. Therefore, the Tribunal found the Commissioner's findings unsustainable, indicating a prima facie case for waiver of the duty, interest, and penalty amount. Consequently, the Tribunal granted a waiver of pre-deposit of duty, interest, and penalty, staying the recovery until the appeal's disposal, aligning with the decision made in the previous case involving M/s. Akshera Papers.

In conclusion, the Tribunal's judgment clarified the interpretation of the Notification No.4/2006-CE regarding the duty exemption for kraft paper manufacturing, emphasizing the importance of specific conditions outlined under different serial numbers and granting a waiver of the duty, interest, and penalty amount, following a similar precedent set in a previous case.