2012 (6) TMI 737 - AT - Central Excise

waiver of pre-deposit - assessee has not returned the goods which were received from 100% EOU, without following the proper procedure of consuming them and returned the same after a period of three years - Held that - Appellant is 100% EOU has procured the raw materials for consumption in manufacturing of goods in his factory premises. It is also undisputed that the same goods have been returned back to the original manufacturer being of sub-standard quality and such returns have taken place under proper invoices and AR 3A, which have been acknowledged by the recipient and original manufacturer of the said goods. If that be so, we find that the goods which were received by the appellant without payment of duty from the manufacturer under CT-3, having accounted for and when there is no diversion of the said goods in order to demand the duty, prima facie, we find that the appellant s case is covered by various provisions of the Central Excise Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 - Stay granted.

Summary

Issues:
Waiver of pre-deposit of duty and penalty.

Analysis:
The appellant filed an application seeking the waiver of pre-deposit of duty amounting to Rs. 4,12,004/- along with an equal amount of penalty. The duty liability was confirmed by the adjudicating authority and upheld by the first appellate authority due to the appellant's failure to return goods received from a 100% EOU following the proper procedure. Upon reviewing the records and annexures, it was established that the appellant, as a 100% EOU, had procured raw materials for manufacturing goods in their factory premises. The goods were subsequently returned to the original manufacturer due to being of sub-standard quality, with proper invoices and AR 3A acknowledgments. The Tribunal noted that since there was no diversion of the goods received without payment of duty under CT-3, and all transactions were duly documented, the appellant's case fell within the provisions of the Central Excise Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules, 2001. Consequently, the Tribunal allowed the application for the waiver of pre-deposit amounts and stayed the recovery pending the disposal of the appeal. The judgment was dictated and pronounced in the Court by the judges Shri M.V. Ravindran and B.S.V. Murthy.