2014 (1) TMI 469 - AT - Central Excise

Benefit of Notification No. 39/2001-CE Area based exemption - Undervaluation of goods - Goods cleared from the factory premises to the depot Duty not discharged Waiver of Pre-deposit Held that - The appellant had deposited the entire amount before the issue of show cause notice - Subsequently they filed a refund claim and out of which Rs. 23.62 Lakhs was granted to them - the Revenue is having approximately Rs. 28.96 Lakhs with them out of the amount deposited by the assessee - the issue is one of interpretation and the appellant need not to have paid the amount, as they are working under the area based exemption notification - the appellant has made out a prima facie case in their favour Pre-deposits waived till the disposal Stay granted.

Summary

Issues:
Waiver of pre-deposit of duty amount, interest, and penalty under area based exemption notification.

Analysis:
The judgment pertains to a stay petition seeking the waiver of pre-deposit of duty amount, interest, and penalty totaling Rs. 52,58,133/- under an area based exemption notification. The confirmation of demand arose due to alleged undervaluation of goods cleared from the factory premises to the depot without discharging the duty liability on the value of goods cleared from the depot. The appellant operated under Notification No. 39/2001-CE, allowing them to reclaim duty liability through PLA. It was noted that the appellant had initially paid the duty on consignments from the factory to the depot and subsequently filed a refund claim, with a partial refund granted. The court observed that a significant portion of the deposited amount remained with the Revenue. Given the interpretation issue and the appellant's eligibility under the exemption notification, a prima facie case for the waiver of pre-deposit of the balance amount was established.

The tribunal considered that the appellant, functioning under the area based exemption notification, had already deposited a substantial sum, part of which was refunded, leaving a balance with the Revenue. As the issue revolved around interpretation and the appellant's entitlement under the notification, the tribunal found merit in granting the waiver of pre-deposit for the remaining amount. Consequently, the application for the waiver of pre-deposit of the balance amount was allowed, and recovery was stayed pending the appeal's disposal. The judgment, delivered by Mr. M.V. Ravindran, concluded by pronouncing the decision in favor of the appellant, highlighting the temporary relief granted until the appeal's resolution.