2012 (2) TMI 426 - AT - Central Excise

Waiver of pre deposit - Duty demand - Denial of benefit on Notification No. 43/2001 - Held that - wherein waiver and stay were granted in respect of an amount of duty of excise which was demanded from the assessee on the ground that the benefit of the two notifications could not have been simultaneously availed by them. Both sides have adverted to other factual aspects of the case also. However, for the present purpose, we think we can take a view without detailed discussion on such factual details. Prima facie, any violation of conditions of the customs notification would have resulted in a demand of customs duty on the imported materials. The Revenue has no case that the packing materials were procured indigenously by the appellant without following the procedure laid down under Notification No. 43/2001-C.E. (N.T.). This notification prima facie does not refer to any customs exemption notification. On these facts, prima facie, the appellant can claim waiver of pre-deposit and stay of recovery on the strength of the Stay Order cited by the counsel. It is ordered accordingly. In the result, there will be waiver and stay in respect of the duty and penalty amounts - Stay granted.

Summary

Issues:
Waiver and stay application for Central Excise duty and penalty based on Notification No. 43/2001-C.E. (N.T.) and customs Notification No. 94/2004.

Analysis:
The appellant filed an application seeking waiver and stay for Central Excise duty of Rs. 95,82,497/- demanded for a specific period along with an equal amount of penalty. The duty demand was related to packing materials procured duty-free under Notification No. 43/2001-C.E. (N.T.) and used for exporting textile garments under advance licenses with duty-free imported fabrics under customs Notification No. 94/2004. The demand was made on the ground that the appellant could not have availed benefits of both notifications simultaneously. The condition No. 8 of the customs notification was invoked, emphasizing the discharge of export obligation within a specified period. The appellant argued that the benefit under Rule 19 of the Central Excise Rules, 2002 was for packing materials, not the exported products, hence no violation of condition No. 8 could be attributed to them.

The Additional Commissioner interpreted condition No. 8 to support the allegations in the show cause notice and the impugned order. The appellant referenced a previous Stay Order where waiver and stay were granted for a similar issue of simultaneous benefit availing under two notifications. The Tribunal considered the factual aspects but focused on the violation of customs notification conditions leading to a demand for customs duty on imported materials. Since there was no evidence of procuring packing materials domestically without following the procedure under Notification No. 43/2001-C.E. (N.T.), the appellant was granted waiver and stay based on the cited Stay Order.

The Tribunal found that the appellant could claim waiver and stay due to the similarities with the previous case, leading to the waiver and stay being granted for the duty and penalty amounts. The miscellaneous application for out-of-turn disposal of the stay application was dismissed as infructuous.