2012 (9) TMI 882 - AT - Central Excise

Waiver of pre deposit - penalty imposed under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944 - Held that - expression into denotes on-going / continous meaning thereby the goods in question i.e. motor vehicles should not be withdrawn from the on-going project. Admittedly, the project is financed by United Nations. The goods are still into the project and are not withdrawn from the project, is also not in dispute. In these circumstances, the applicant is able to make out a prima facie case for total waiver of pre-deposit. Following the case of Tata Motors Ltd. v. CCE & ST, Jamshedpur 2012 (12) TMI 884 - CESTAT, Kolkata on similar facts and circumstances of the case this Tribunal has granted unconditional stay - Stay granted.

Summary

Issues:

1. Whether the applicant is entitled to waiver of pre-deposit of duty and penalty imposed under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944 based on the interpretation of Notification No. 108/95-C.E., dated 28-8-1995 as amended.

Analysis:

The applicant sought a waiver of pre-deposit of duty amounting to Rs. 36,04,742.00 and an equal penalty imposed under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944. The contention put forth by the ld. Sr. Manager (Finance) for the applicant was centered on the denial of benefits under Notification No. 108/95-C.E., dated 28-8-1995 due to the interpretation of the Explanation 2 to the Notification. The crux of the argument was that the goods supplied by the applicant, specifically excavators and parts, should not be withdrawn from the ongoing project, as indicated by the term "into" in the Explanation. It was emphasized that the project in question was financed by the United Nations, and the goods remained within the project without being withdrawn. This interpretation was crucial in determining the eligibility for the waiver of pre-deposit.

The ld. AR for the Department reiterated the findings of the ld. Commissioner, emphasizing the interpretation of the Explanation 2 inserted by Notification No. 13/2008-C.E., dated 1-3-2008. The Explanation clarified that the benefit under the notification is available when the goods brought into the project are not withdrawn by the supplier or contractor. The Tribunal, in its analysis, observed that the term "into" in the Explanation conveys an ongoing or continuous nature, indicating that the goods, in this case, motor vehicles, should not be withdrawn from the ongoing project. It was noted that the project was financed by the United Nations, and the goods supplied by the applicant were still within the project and had not been withdrawn. Drawing parallels to a previous case involving Tata Motors Ltd., where unconditional stay was granted on similar grounds, the Tribunal found that the applicant had presented a prima facie case for total waiver of pre-deposit. Consequently, all dues adjudged in the case were waived, and the recovery thereof was stayed during the pendency of the appeal, thereby allowing the stay petition.

In conclusion, the Tribunal granted the applicant's request for a waiver of pre-deposit based on the interpretation of the relevant notification and the ongoing nature of the goods supplied to the project financed by the United Nations. The decision aligned with the understanding that the goods should not be withdrawn from the ongoing project to qualify for the benefits under the notification, ultimately leading to the allowance of the stay petition.