2015 (11) TMI 519 - AT - Central Excise

Waiver of pre deposit - whether demand of duty based on earlier order dt 31/3/93, passed by Assistant Commissioner finalizing the classification / rate of duty of the products manufactured by the appellant when the same was sad aside & remanded by CESTAT - Held that - SCN dt 31/12/97 was issued for demanding duty of ₹ 2,62,29,188/- and for imposition of penalty. There was not proposal in this show cause notice to decide the classification of the products & non admissibity of an exemption notification. By re-deciding the issue of classification / exemption in Para- 4.12 to 4.23 adjudicating order, prime facie, Adjudicating authority has exceeded the scope of the show cause notice when the same was already decided by the Assistant Commissioner and appellant also brought to the notice of the Adjudicating authority that they are contemplating filing of appeal against the said order of Assistant Commissioner. The other issue raised by the appellant., that a demand raised on the basis of earlier order of Assistant Commissioner, which is set aside does not survive, also needs deeper considerations. Appellant is, therefore, able to make a prima facie good case for complete waiver of the confirmed dues & penalty - Stay granted.

Summary

Issues:
1. Whether demand of duty based on an earlier order passed by Assistant Commissioner, which was set aside and remanded by CESTAT, is valid.
2. Whether the Adjudicating authority was justified in re-deciding the classification/rate of duty issue when the matter was already pending before the Commissioner.

Analysis:
1. The appellant filed a stay application against the OIO confirming a demand of Rs. 2,62,29,188/- and an equivalent penalty based on an order by the Commissioner of Central Excise. The appellant argued that the Tribunal declined to entertain their appeal earlier due to a lack of clearance certificate from COD, which was later obtained. The appellant also highlighted that a separate appeal on the classification/rate of duty issue was pending. The Adjudicating authority confirmed the demand, which the appellant contested, stating that the show cause notice was based on an order set aside by CESTAT, and therefore, did not survive. The appellant made a prima facie case for a complete waiver of the confirmed dues and penalty, leading to the Tribunal ordering a stay on recovery until the appeal's disposal.

2. The issue revolved around the validity of the demand of duty and penalty based on the earlier order of the Assistant Commissioner, which had been set aside and remanded by CESTAT. The appellant contended that the Adjudicating authority exceeded the scope of the show cause notice by re-deciding the classification/exemption issue, which was already decided by the Assistant Commissioner. The Tribunal acknowledged that the Adjudicating authority had potentially overstepped by re-deciding the issue when the matter was pending before the Commissioner. The Tribunal found merit in the appellant's argument that a demand based on an order that was set aside did not survive, warranting a deeper consideration. Consequently, the Tribunal allowed the stay application, granting a stay on the recovery of the confirmed demand and penalty until the appeal's final disposal.