2016 (1) TMI 332 - AT - Central Excise

Waiver of pre-deposit - Benefit of area based exemption Notification No.32/99-CE dated 08.07.1999. - Revenue contended that since the Applicant were undisputedly engaged in the process of re-packing of goods from bulk packs therefore they are not eligible to the benefit of said Notification w.e.f. 25.04.2007. - Held that - On a careful analysis of the arguments advanced by both sides we find the issue involved is substantial question of law and highly technical and debatable; it requires detailed analysis of the provisions of law precedents and the facts involved in the present case which would be carried out at the time of disposal of the Appeal. We also find that the Applicant had disputed the maintainability of the demand on the ground of limitation as well as non filing of appeals against the refund Orders by the Revenue. In these circumstances we are of the opinion that the Applicant could able to make out a prima facie case for total waiver of pre-deposit of dues adjudged. Stay granted.

Summary

Issues: Application seeking waiver of pre-deposit of duty and penalty under Section 11AC of Central Excise Act, 1944. Interpretation of Notification No.32/99-CE dated 08.07.1999 as amended by Notification No.21/2007 dated 25.04.2007. Applicability of amendment to units existing before the effective date. Challenge on grounds of limitation and non-filing of appeals against refund orders.

Interpretation of Notification No.32/99-CE and its Amendment:
The case involved a dispute regarding the applicability of Notification No.32/99-CE dated 08.07.1999, specifically after an amendment introduced on 25.04.2007. The Applicant was accused of wrongly availing benefits under the said Notification due to engaging in re-packing activities. The Applicant argued that the amendment should not apply to units existing before its effective date, relying on the judgment of the Hon'ble Himachal Pradesh High Court in a similar case. The Revenue contended that the exemption could be revoked in public interest, and the amendment excluded activities like re-packing regardless of whether they amounted to manufacture. The Tribunal acknowledged the technical and debatable nature of the issue, deferring detailed analysis to the appeal's disposal.

Validity of Demand and Limitation Issues:
The Applicant challenged the demand notice on grounds of limitation and non-challenge of refund orders. They argued that the demand, issued in 2012 for refunds sanctioned in 2007-08, was time-barred due to regular refund procedures followed without concealment. The Revenue defended the demand, citing the applicability of Section 11A of the Central Excise Act, 1944, to recover erroneous refunds. The Tribunal found the issues raised to be substantial questions of law, granting a waiver of pre-deposit based on a prima facie case made by the Applicant and staying recovery during the appeal's pendency.

Conclusion:
The Tribunal, after hearing both sides and analyzing the contentions, granted a waiver of pre-deposit of duty and penalty, staying recovery during the appeal process. The case involved complex legal interpretations of the exemption notification and its amendment, as well as challenges regarding the demand's validity based on limitation and non-appeal against refund orders. The Tribunal deferred a detailed analysis of the legal provisions and precedents for the appeal's disposal, recognizing the technical and debatable nature of the issues involved.