2015 (10) TMI 1172 - AT - Central Excise

Waiver of pre deposit - Demand of differential duty - Concessional rate of duty - Held that - prima facie, the appellant has not made out a case for full waiver of pre-deposit ordered. Hence, the appellant is directed to make pre-deposit of an amount of ₹ 4,00,000 within a period of eight weeks and to report compliance on 30.07.2015. Upon deposit of the said amount pre-deposit of the balance amounts of duty along with interest and penalty shall stand waived and its recovery thereof stayed during the pendency of the appeal. - Stay granted.

Summary

Issues Involved:
1. Whether "Thin Client" is considered a computer entitled to concessional rate of duty.
2. Application for waiver of differential duty and penalty confirmed by the adjudicating authority.

Analysis:

1. The primary issue in this case revolves around whether the "Thin Client" manufactured by the appellant qualifies as a computer entitled to a concessional rate of excise duty. The appellant, a manufacturer of computers and related goods, also produces the "Thin Client" and purchases "Windows XP Software" to be loaded into it. The dispute arises from the differential duty rates applied to the "Thin Client" and the software. The Revenue alleged that the appellant cleared both the "Thin Client" and the software under the same invoices, with duty paid at 8% for software and 12% for the "Thin Client." Consequently, a show cause notice was issued demanding differential duty at 16%, which was confirmed by the original authority and upheld by the Commissioner (Appeals). The key contention was whether the "Thin Client" should be considered a computer for the purpose of concessional duty rates under Notification No. 6/2006-CE.

2. The appellant sought a waiver of the differential duty and penalty imposed by the adjudicating authority. After hearing both parties and examining the records, the Tribunal found that the appellant had not established a case for a full waiver of the pre-deposit. Consequently, the appellant was directed to make a pre-deposit of Rs. 4,00,000 within eight weeks. Upon compliance with this pre-deposit, the balance amounts of duty, interest, and penalty would be waived, and the recovery thereof stayed during the appeal's pendency. This decision was pronounced in open court on 21.5.2015.

In conclusion, the judgment addressed the classification of the "Thin Client" as a computer for excise duty purposes and the appellant's application for waiver of differential duty and penalty. The Tribunal's decision required the appellant to make a pre-deposit to proceed with the appeal process, emphasizing the need for compliance with the specified amount within the given timeframe.