2013 (11) TMI 1120 - AT - Central Excise

Complaince of Notification No. 8/2003 Waiver of pre-deposit Held that - It is clarified by Board Circular No.213/28/87-CX.6 dt. 27.11.1987, that collapsible tubes, crown corks, PP caps, Metal containers, HDPE bags etc. bearing the brand name of large manufacturers/traders would not be hit by the mischief of SSI exemption notification - the demand of duty for normal period is payable - the applicant directed to deposit a sum of Rupees Twelve lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
Demand of duty for the period December 2003 to August 2008, applicability of Board Circulars, limitation period, duty payment following Supreme Court decision.

Analysis:
The case involved the manufacture of HDPE bottles with the brand name Parachute on a job work basis. The adjudicating authority confirmed a duty demand of Rs.72,18,560 for the period December 2003 to August 2008, citing a contravention of para-4 of Notification No.8/2003-CE. The appellant argued that the demand for duty during this period was mostly barred by limitation, referring to Board Circulars No. 213/28/87-CX.6 and No.71/71/94-Cx. The appellant mentioned that they started paying duty following Board Circular No.354/124/2008-TRU, which withdrew the earlier circulars. The respondent pointed out that duty should have been paid post the Supreme Court decision in the case of Kohinoor Elastics Pvt. Ltd. Vs CCE Indore - 2005 (33) ELT 3 (SC).

The Tribunal considered the arguments from both sides and found merit in the appellant's submission regarding the limitation period. Referring to Board Circular No.213/28/87-CX.6 and the Supreme Court decision in the case of Kohinoor Elastics Pvt. Ltd., the Tribunal noted that the appellant started paying duty in compliance with Board Circular No.354/124/2008-TRU. However, the Tribunal held that prima facie, the demand of duty for the normal period was payable. As a result, the appellant was directed to deposit Rs.12,00,000 within four weeks. Upon this deposit, the predeposit of the balance duty amount, interest, and penalty was waived, and the recovery was stayed during the appeal's pendency. The compliance deadline was set for 18.6.2013.

In conclusion, the Tribunal ruled in favor of the appellant regarding the limitation period but directed payment of a specific amount for the normal period, providing relief on predeposit and recovery during the appeal process.