2014 (1) TMI 372 - AT - Central Excise

Waste and scrap cleared from factory without payment of duty Waiver of Pre-deposit Assessee contended that they were doing trading in waste and scrap and, as such, the waste and scrap is not the one generated in their factory various documentary evidences relied upon - Held that - The issue is contentious and arguable and lot of evidence is required to be gone through for appreciating the above stand of the applicant - the applicant is directed to deposit an amount of Rupees Twenty Five Lacs as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
Demand of duty on clearance of waste and scrap without payment, requirement of specific permission for trading activities by a manufacturing unit.

Analysis:
The judgment pertains to the confirmation of a demand of duty amounting to Rs. 82,26,002 against the applicant, along with the imposition of an identical penalty. The issue at hand is the clearance of waste and scrap from the factory without payment of duty. The appellants contended that they were engaged in trading waste and scrap not generated in their factory, supported by documentary evidence. However, the Adjudicating Authority rejected this plea, emphasizing that as a manufacturing unit, specific permission was necessary for trading activities, which the appellant failed to obtain. This led to the dismissal of the appellant's contention.

Upon reviewing the arguments, the Tribunal found the issue to be contentious and requiring substantial evidence for a comprehensive assessment. Notably, the appellant did not cite financial hardship. Consequently, the Tribunal directed the appellant to deposit Rs. 25,00,000 towards duty within twelve weeks and report compliance by a specified date. Upon this deposit, the pre-deposit of the remaining duty balance and the penalty amount would be waived, with recovery stayed during the appeal's pendency. This decision aims to balance the interests of both parties while ensuring compliance with legal obligations and procedural requirements.

Overall, the judgment underscores the importance of adhering to regulatory frameworks, particularly for manufacturing units engaging in trading activities. It highlights the significance of obtaining necessary permissions and complying with duty payment obligations to avoid legal repercussions. The Tribunal's decision reflects a pragmatic approach by allowing partial waiver upon deposit, indicating a willingness to facilitate compliance while upholding legal standards and due process.