2015 (2) TMI 748 - AT - Central Excise

Waiver of pre deposit - Denial of benefit of exemption Notification No.4/2006 (S.No.1C) - appellants had been exporting cement in 50 kg. bags to Nepal on payment of duty leviable as per S.No.1C of Notification No.4/2006-CE dated 1.3.2006 - Held that - In terms of third proviso to Sl. No.1C of the table annexed to the Notification No.4/2006-C.E., where the retail sale price of the goods are not required to be declared under SWM Rules, 1977 and are not declared, the duty shall be determined as in the case of goods cleared in other than packaged form. Since, in this case the goods had been cleared for export to Nepal and as such there was no requirement to declare the MRP on the bags of the cement in accordance with the provisions of SWM Rules, 1977, the cement would have to be treated as other than packaged form even though the MRP had been printed and accordingly, we are of the prima facie view that the same would be covered by Sl. No.1C of the table annexed to the Notification No.4/2006-C.E., where the duty is 14% adv. or ₹ 400/- per M.T. whichever is higher. There is no dispute that if the duty is charged at the rate prescribed in Sl. No.1C of the table annexed to the Notification No.4/2006-C.E., there would be no short payment. - Stay granted.

Summary

Issues:
1. Duty demand confirmation for the period March 2011 to September 2011.
2. Applicability of exemption Notification No.4/2006 (S.No.1C) to exported goods.
3. Interpretation of the third proviso to entry No.1C of Notification No.4/2006.
4. Benefit entitlement and citation of relevant judgments.

Analysis:
The case involved a stay petition and appeal against the Order-in-Original confirming duty demand of Rs. 1,41,98,230 for the period March 2011 to September 2011, without imposing a penalty. The dispute centered on the applicability of exemption Notification No.4/2006 (S.No.1C) to goods exported to Nepal in 50 kg bags. The Revenue contended that as the goods were exported, the Standards of Weights & Measures rules did not apply, leading to duty demand at the tariff rate. The appellants argued for the benefit claimed, citing a relevant CESTAT judgment.

The Tribunal found the issue straightforward and proceeded to decide the appeal without pre-deposit, based on the third proviso to entry No.1C of Notification No.4/2006. This proviso stated that where the retail sale price of goods is not required to be declared under the Standards of Weights and Measures rules, duty should be determined as for goods cleared in other than packaged form. Since the goods exported to Nepal did not require MRP declaration, they fell under S.No.1C of the notification. The Tribunal referenced a judgment to support this interpretation.

The Tribunal agreed with the cited judgment's reasoning, which explained that goods cleared for export do not need MRP declaration, thus falling under "other than packaged form." The Tribunal waived the pre-deposit requirement, acknowledging the appellant's prima facie case. While the previous CESTAT judgment only granted a stay, the Tribunal fully endorsed the reasoning and granted full merit to the appeal, ultimately allowing it.