2001 (9) TMI 142 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty and penalty confirmed by the Commissioner (Appeals) - Determination of place of removal for excise duty liability.

Analysis:
The Application was filed by M/s. Frexton Cables (India) seeking waiver of pre-deposit of Central Excise duty amounting to Rs. 11,74,859/- and penalty of Rs. 4 lakhs, confirmed by the Commissioner (Appeals). The Appellants contended that the goods are delivered to the buyers at the factory/station of despatch, which is the place of removal, and not the destination. They argued that the property in the consignment passes to the consignee upon delivery of the railway receipt, as per Section 74 of the Railways Act, 1989. The Appellants emphasized that due to the sealing of their factory for 8 months, any deposit would cause them undue hardship. On the other hand, the opposing party argued that the ownership of the goods remains with the Appellants, as per the Supply Order and the fact that the insurance policy was not taken in the name of the buyers. Reference was made to the decision in the case of Escorts JCB Ltd. v. C.C.E., New Delhi, and the interpretation of Section 108 of the Railways Act. The Appellants highlighted that as per the Prabhat Zarda Factory case, the place of removal and the place of taking delivery of the goods may be different.

The Tribunal considered the submissions from both sides and acknowledged that the Appellants presented a strong prima facie case in their favor. Consequently, the recovery of the entire amount of duty and penalty was stayed during the pendency of the appeal, with the appeal scheduled for regular hearing on 15-10-2001. The Tribunal's decision to stay the recovery indicates a favorable inclination towards the Appellants' argument regarding the determination of the place of removal for excise duty liability. The Tribunal's decision to grant a stay on the recovery reflects a preliminary assessment of the merits of the Appellants' case and suggests a likelihood of success in the appeal. The Tribunal's decision to stay the recovery during the pendency of the appeal demonstrates a balanced approach to the issue raised by the Appellants regarding the place of removal for excise duty liability, taking into account the potential hardship faced by the Appellants due to the factory's closure.