2014 (5) TMI 126 - HC - Central Excise

Benefit of concessional rate of duty - Content of 15% betel nut in Chutki - Held that - order in original is appealable under section 35 B of the Central Excise Act, 1944. The petitioner has also indicated that it would be filing an appeal before the CESTAT within three weeks. Consequently, we dispose of this writ petition by directing that in case the petitioner files the appeal within three weeks before the CESTAT along with an application for waiver of pre deposit under section 35 F of the Central Excise Act, 1944, the demands and penalties raised in the order in original shall remain stayed till the disposal of the said application under section 35 F by the Tribunal - Conditional stay granted.

Summary

Issues Involved:
1. Concessional rate of duty based on betel nut content in the final product.
2. Discrepancy in betel nut content test results between the petitioner and the Commissioner of Central Excise.
3. Appeal process under section 35 B of the Central Excise Act, 1944.
4. Stay on demands and penalties pending appeal before CESTAT.
5. Unavailability of test report from Sri Ram Institute of Industrial Research.

Analysis:
1. The primary issue in this case revolves around the concessional rate of duty claimed by the petitioner based on the betel nut content in the final product marketed as "Chutki." The Commissioner of Central Excise raised demands and imposed penalties citing that the betel nut content exceeded 15% by weight, contrary to the petitioner's claim.

2. A discrepancy arose concerning the test results of betel nut content in the product. The petitioner presented test reports from the Delhi Test House showing betel nut content below the threshold, while a sample tested at the Central Revenue's Control Lab indicated a higher betel nut content, leading to the imposition of demands and penalties by the Commissioner.

3. The judgment highlights the appeal process available to the petitioner under section 35 B of the Central Excise Act, 1944, allowing them to challenge the order-in-original before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) to seek redressal regarding the betel nut content issue.

4. Pending the appeal before CESTAT, the High Court directed that if the petitioner files an appeal within three weeks along with an application for waiver of pre-deposit under section 35 F of the Act, the demands and penalties specified in the original order shall remain stayed until the Tribunal's decision on the waiver application.

5. Additionally, the unavailability of the test report from Sri Ram Institute of Industrial Research, which the petitioner believes may favor their case, was noted. The Court suggested that the petitioner can request a copy of this report before the Tribunal during the appeal process for further examination and consideration.

This detailed analysis outlines the key issues, legal procedures, and directions provided by the High Court in the judgment concerning the betel nut content dispute in the petitioner's product.