2015 (2) TMI 40 - AT - Central Excise

Waiver of pre deposit - Denial of the benefit of Notification No. 23/2003-CE dated 341/03/2003 - Imposition of equivalent penalty - DTA clearances at concessional rate of excise duty - Demand of differential duty - Held that - As regards the merit of the case, on a plain reading of the exemption notification, what is permitted to be cleared into DTA at the concessional rate under notification No.23/2003-CE is only 50% of the FOB value of exports made during the year. If the clearances exceed this limit, no doubt, the appellant can clear the goods into DTA but duty liability has to be discharged at the full rate of duty. Therefore, there is merit in the contention of the Revenue that the appellant has exceeded the limit for clearances at concessional rate. However, we observe that the excise authorities were aware of the physical exports made by the appellant and also the clearances effected into the DTA. Therefore, they cannot take the plea that the appellant suppressed or willfully mis-stated any facts. In the absence of suppression or willful mis-statement of facts, the demand would be hit by time bar. In view of the above, we are of the considered view that the appellant has made out a prima facie case for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal. - Stay granted.

Summary

Issues:
Excise duty demand denial under Notification No. 23/2003-CE for excess clearances into DTA, time-barred demand, applicability of concessional rate, suppression of facts, grant of stay.

Analysis:
1. Excise Duty Demand Denial under Notification No. 23/2003-CE:
The appellant exceeded the 50% limit for clearances at concessional rate, leading to a demand for differential duty. The department contended that full duty should have been discharged on excess clearances. The appellant argued that DTA entitlements can be carried forward under the Foreign Trade Policy, allowing concessional rate as long as total entitlements are not exceeded. The demand, issued three years after clearances, was challenged as time-barred.

2. Time-Barred Demand and Suppression of Facts:
The appellant highlighted that DTA entitlements and exports were certified by Excise Officer and monitored by the Development Commissioner quarterly. The demand made after three years was deemed time-barred due to lack of suppression or willful misstatement of facts by the appellant. This lack of suppression or misstatement rendered the demand unsustainable.

3. Applicability of Concessional Rate:
The Revenue argued that despite the carry-forward provision in the Foreign Trade Policy, the concessional rate applies only to clearances not exceeding the 50% limit of FOB value of exports. The condition of Notification No. 23/2003-CE was deemed clear, limiting the exemption to clearances within the specified percentage.

4. Grant of Stay:
Upon considering both sides' submissions, the Tribunal found merit in the Revenue's contention regarding the 50% limit for concessional clearances. However, acknowledging the awareness of authorities regarding exports and clearances, the Tribunal ruled that the demand lacked suppression or misstatement of facts, making it time-barred. As a result, the Tribunal granted unconditional waiver from pre-deposit of dues and stayed recovery during the appeal's pendency.

In conclusion, the Tribunal upheld the 50% limit for concessional clearances under Notification No. 23/2003-CE but deemed the demand time-barred due to lack of suppression or misstatement of facts, granting a stay on recovery during the appeal.