2014 (6) TMI 680 - AT - Central Excise

Waiver of pre-deposit of duty - 100% EOU - Clearance of fruit pulp to their DTA unit - DTA unit got processed the fruit pulp and ultimately sold the juice. - Revenue is of the view that the applicants and the DTA are related person, therefore the applicants are liable to pay duly on MRP on the juice cleared by the DTA unit - Held that - applicants cleared fruit pulp and are liable to pay appropriate duty on the fruit pulp and not on the juice, hence the applicant has a prima facie case in their favour and the amount already deposited is sufficient for hearing of the appeal. Pre-deposit of the remaining dues is therefore waived and recovery thereof stayed for hearing of the appeal. - Stay granted.

Summary

Issues Involved: Application for waiver of pre-deposit of duty, related party transactions, liability of payment on MRP, prima facie case in favor of the applicant.

Analysis:
1. Application for Waiver of Pre-deposit of Duty:
The applicant filed an application seeking waiver of pre-deposit of duty amounting to Rs. 28,16,877, along with interest and penalty. It was noted that the applicant had already deposited a sum of Rs. 3,21,319. The Tribunal considered the facts and circumstances of the case and found that the applicant had a prima facie case in their favor. Consequently, the Tribunal waived the pre-deposit of the remaining dues and stayed the recovery for the hearing of the appeal.

2. Related Party Transactions and Liability of Payment on MRP:
The case involved a situation where a 100% Export Oriented Unit (EOU) had cleared fruit pulp to their Domestic Tariff Area (DTA) unit. The DTA unit processed the fruit pulp and sold the juice, leading to a dispute regarding the liability of payment on the Maximum Retail Price (MRP) of the juice cleared by the DTA unit. The Revenue contended that the applicant and the DTA unit were related parties, thereby asserting that the applicant was liable to pay duty on the MRP of the juice. However, the applicant argued that both units were independent, and the EOU unit had cleared fruit pulp with necessary permissions, making them liable to pay duty only on the fruit pulp and not on the final product sold by the DTA unit. The Tribunal, after considering the submissions, found merit in the applicant's argument and held that the demand was not sustainable.

3. Prima Facie Case in Favor of the Applicant:
Considering the facts presented, the Tribunal concluded that the applicant had a prima facie case in their favor. The Tribunal emphasized that the applicant, being an EOU, was liable to pay duty on the fruit pulp and not on the juice cleared by the DTA unit. The Tribunal's decision to waive the pre-deposit of the remaining dues and stay the recovery for the appeal hearing was based on this assessment of the applicant having a strong case in their favor.

In conclusion, the Tribunal's judgment in this case revolved around the application for waiver of pre-deposit of duty, the interpretation of related party transactions, and the liability of payment on the MRP. The Tribunal found that the applicant had a prima facie case in their favor, leading to the waiver of the remaining dues and the stay of recovery for the appeal hearing.