2004 (2) TMI 102 - AT - Central Excise

Summary

Issues: Stay application for waiver of duty pre-deposit, equivalent penalty under Section 11AC, penalties under Rule 173Q and Rule 209A, and stay of recovery proceedings.

1. Stay Application for Waiver of Duty Pre-deposit:
The applicants filed a stay application seeking waiver of duty pre-deposit amounting to Rs. 2,54,375/- and equivalent penalty under Section 11AC, along with penalties under Rule 173Q and Rule 209A of the Central Excise Rules, and stay of recovery proceedings. The Counsel for the applicants argued that there is a strong prima facie case in their favor, particularly concerning the issue of clubbing of clearances. He contended that the Department should recover duty from the main party, which is the manufacturer, if clearances are to be clubbed. Additionally, he highlighted that in this case, the clearances by different units cannot be clubbed as the appellant is a Private Limited Company, while the other units are of partnership/proprietary nature. He cited the Supreme Court decision in the case of Supreme Washers Private Limited v. CCE, Pune, emphasizing that limited companies should be treated as separate legal entities, and their clearances should not be clubbed. He also referred to a Tribunal decision supporting this stance.

2. Arguments by Revenue:
On the other hand, the representative for the Revenue defended the Department's decision to club the clearances of the three units. It was mentioned that the appellants had previously accepted the clubbing of clearances and sought settlement through the Settlement Commission, which was unsuccessful due to other reasons.

3. Tribunal's Decision:
After careful consideration of the submissions from both sides and reviewing the relevant orders and decisions, the Tribunal, in light of the Supreme Court decision in the case of Supreme Washers Private Limited, found that a prima facie case favored the applicants. Consequently, the Tribunal allowed the stay applications, granting relief to the applicants in terms of waiver of duty pre-deposit, penalties, and stay of recovery proceedings.