2016 (2) TMI 106 - AT - Central Excise

Cost recovery charges - whether the appellant never opted to operate under cost recovery scheme, confirmation of amount under the said scheme by the authorities below is not proper and justified? - Held that - The appellant vide its letter dated 15.12.2009 had requested the Jurisdictional Deputy Commissioner of Central Excise to deposit the MOT charges instead of cost recovery charges for the period from 1.1.2010 to 31.12.2010. Since the dispute in the present case is for the period from 2007 to 2009, when the appellant had paid ₹ 2,32,500/- for operating under the cost recovery scheme, it is evident that the charges are payable in entirety by the appellant, which has not been paid. Thus, the short paid amount on that account is payable to the Central Excise Department in terms of the statutory mandates. Therefore, no infirmity in the impugned order passed by the Ld. Commissioner (Appeals), and thus, the appeal filed by the appellant is dismissed.

Summary

Issues:
1. Dispute over short paid cost recovery charges by the appellant.
2. Appellant's argument of not opting for cost recovery scheme.
3. Revenue's justification for confirming the cost recovery charges.
4. Interpretation of the appellant's request to deposit MOT charges instead of cost recovery charges.

Analysis:
1. The appellant, a 100% Exported Oriented Undertaking engaged in manufacturing telecom equipment, was found to have short paid cost recovery charges for deploying Central Excise staff in the factory. The dispute arose from the confirmation of the short paid amount along with a penalty under relevant regulations.

2. The appellant contended that it never opted to operate under the cost recovery scheme, citing a letter addressed to the Jurisdictional Deputy Commissioner expressing a desire to operate under the Merchant Over Time (MOT) Scheme instead. The appellant argued that the confirmation of charges under the cost recovery scheme was unjustified.

3. In response, the Revenue presented evidence that the appellant had voluntarily paid cost recovery charges for certain years before opting for the MOT Scheme. The Revenue argued that since the appellant had previously paid such charges and a specific amount remained short paid, the confirmation of charges was legitimate.

4. The Tribunal examined the appellant's request to deposit MOT charges instead of cost recovery charges for a specific period. However, considering the appellant's past payments under the cost recovery scheme and the outstanding amount, the Tribunal upheld the decision of the Ld. Commissioner (Appeals) to confirm the charges. The Tribunal found no fault in the impugned order and dismissed the appeal.

In conclusion, the Tribunal ruled in favor of the Revenue, upholding the confirmation of the short paid cost recovery charges against the appellant. The decision was based on the appellant's previous payments under the cost recovery scheme and the outstanding amount owed to the Central Excise Department, as per statutory requirements.