2014 (10) TMI 239 - AT - Central Excise

Waiver of pre deposit - Seizure of documents - Misdeclaration of goods - Held that - applicant made clearances of cheese yarn in the guise of Plain Reel Hank yarn under the parallel invoices. It is noted that the number and date of the parallel invoices were also recorded in the annexure to the show cause noted. We find that the applicant removed dutiable yarn on cheese and cones without payment of duty in the guise of exempted plain reel hank yarn. Hence, it is required to examine the facts in detail at the time of appeal hearing. applicant failed to make out a prima facie case for waiver of predeposit of entire amount of duty along with interest and penalty - Partial stay granted.

Summary

Issues: Application for waiver of predeposit of duty, demand of duty on cotton yarn, appeal against adjudication order, reliance on bank statement data, clearance of cheese yarn in guise of plain reel hank yarn, failure to make out a prima facie case for waiver.

In this case, the applicant filed an application seeking waiver of predeposit of duty amounting to Rs. 22,48,730 along with interest and penalty. The central excise officers had visited the applicant's factory and seized records, leading to a Show Cause Notice proposing a duty demand of Rs. 28,25,430 in relation to cheese yarn cleared as plain reel hank yarn. The adjudicating authority initially dropped the demand but imposed a penalty. However, the Commissioner (Appeals) set aside the order, confirming the demand of Rs. 22,48,730 along with interest and penalty, and appropriating a previously paid amount of Rs. 5,00,000. The applicant's advocate argued that the bank statement data, which was disregarded by the Commissioner (Appeals), should have been considered, while the Revenue supported the Commissioner's decision.

Upon reviewing the annexure to the Show Cause Notice, it was found that the applicant had made clearances of cheese yarn disguised as plain reel hank yarn through parallel invoices, removing dutiable yarn without paying duty. Consequently, the Tribunal directed the applicant to make a further deposit of Rs. 5,00,000 within six weeks, with the balance of duty, interest, and penalty waived pending appeal disposal. The Tribunal concluded that the applicant had failed to establish a prima facie case for the complete waiver of predeposit.

In summary, the Tribunal's decision revolved around the demand of duty on the cotton yarn, the appeal against the adjudication order, the reliance on bank statement data, the clearance of cheese yarn in the guise of plain reel hank yarn, and the applicant's failure to substantiate a prima facie case for the waiver of predeposit. The Tribunal upheld the partial waiver condition, emphasizing the need for further deposit while allowing the appeal process to proceed.