2015 (3) TMI 245 - AT - Customs

Waiver of pre deposit - Differential duty - Penalty u/s 114A - benefit of the notification No. 01/2011-CE dated 01/03/2011 as amended by notification No. 16/2012-CE dated 17/03/2012 - Held that - goods are manufactured under customs bond and when cleared from the customs bond, custom duty rates are applicable. Notification No. 01/2011-CE dated 01/03/2011 as amended by notification No. 16/2012-CE dated 17/03/2012 prescribed an excise duty rate of 2% adv on the goods subject to the condition that no cenvat credit of duty paid on inputs or input services has been taken under Cenvat Credit Rules, 2004. This condition stipulated in the Notification clearly shows that the rates are prescribed for domestically manufactured products/goods and does not apply to imported goods as the condition cannot be satisfied by the manufacturer abroad. Therefore, the imported goods will not be eligible for the aforesaid exemption. As the goods are manufactured in customs bond are treated on par with the imported goods, the appellants are not eligible for the aforesaid exemption. This Tribunal's decision in the case of Priyesh Chemicals & Metals (2000 (5) TMI 72 - CEGAT, NEW DELHI) supports this view. Accordingly, we are of the considered view that the appellant has not made out a prima facie case for complete waiver of pre-deposit of the dues adjudged against them - Partial stay granted.

Summary

Issues: Appeal against Order-in-Original confirming duty on imported vessels, eligibility for exemption under notifications, applicability of CENVAT credit rules, and stay petition for differential duty and penalty under Customs Act, 1962.

Analysis:
1. The judgment pertains to an appeal against an Order-in-Original confirming a differential duty on vessels imported by the Appellant along with penalties under the Customs Act, 1962. The Appellant claimed eligibility for exemption under notifications based on the manufacture of vessels under customs bond. The Ld. adjudicating authority confirmed the duty, leading to the appeal.

2. The Appellant contended that they are entitled to exemption under notification No. 01/2011-CE, as amended, which prescribed a duty rate subject to conditions, including no availing of CENVAT credit on inputs or input services. The Appellant relied on a circular clarifying the application of the exemption to manufacturing and argued that denial based on the circular was unjustified. The Appellant sought a stay on the demand.

3. The Revenue argued that the exemption condition of non-availing credit on inputs or services does not apply to imported goods, as they were manufactured under customs bond without duty payment. Referring to a precedent, the Revenue contended that conditional exemptions do not extend to imported goods. The Revenue opposed the Appellant's plea for a stay.

4. The Tribunal analyzed the submissions and observed that the goods were indeed manufactured under customs bond, making them subject to custom duty rates upon clearance. The Tribunal noted that the exemption notifications were intended for domestically manufactured goods, excluding imported goods due to the condition of non-availing CENVAT credit. Citing the precedent in Priyesh Chemicals & Metals case, the Tribunal held that the Appellant did not establish a prima facie case for a complete waiver of pre-deposit.

5. Consequently, the Tribunal directed the Appellant to make a pre-deposit of a specified amount within a stipulated timeframe, with the balance of dues waived upon compliance. The recovery of the remaining dues was stayed during the pendency of the appeal, based on the Tribunal's findings regarding the eligibility for exemption under the notifications and the application of CENVAT credit rules to imported goods.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the arguments presented by both parties.