2004 (6) TMI 171 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery of duty amount.
2. Eligibility for exemption under Notification No. 10/97-C.E. for computers supplied to a university.
3. Validity of withdrawal of essentiality certificate by the university.
4. Application for early disposal of the appeal.

Analysis:
1. The appellants sought waiver of pre-deposit and stay of recovery of duty amount of Rs. 2,03,904. The demand was based on the denial of exemption under Notification No. 10/97-C.E. for computers supplied to a university. The appellants had initially fulfilled all conditions under the notification, including producing an essentiality certificate from the University Registrar. However, the subsequent withdrawal of the certificate led to the demand for duty. The Tribunal considered the appellants' submission that withdrawal of the certificate should not affect the benefit of the notification, especially since duty was paid at the prescribed rate. Consequently, the Tribunal granted waiver of pre-deposit and stay of recovery for the duty amount.

2. The issue revolved around the eligibility of the appellants for exemption under Notification No. 10/97-C.E. The notification granted full exemption from Central Excise duty for computers supplied to specific institutions, subject to fulfilling certain conditions, including producing an essentiality certificate. Despite meeting the conditions initially, the withdrawal of the essentiality certificate by the University Registrar led to the demand for duty. The Tribunal acknowledged the appellants' compliance at the time of supply and considered the subsequent withdrawal as insufficient grounds for denying the exemption. This interpretation favored the appellants in obtaining the waiver and stay of recovery for the duty amount.

3. The withdrawal of the essentiality certificate by the University Registrar with retrospective effect played a crucial role in the demand for duty by the department. The appellants argued that the withdrawal should not impact their eligibility for exemption under the notification, as they had fulfilled all conditions during the goods' clearance. The Tribunal found merit in this argument, emphasizing that the appellants had met the requirements under the notification when the goods were supplied. This perspective influenced the decision to grant waiver of pre-deposit and stay of recovery for the duty amount, despite the subsequent withdrawal of the essentiality certificate.

4. Regarding the application for early disposal of the appeal, the Tribunal noted that the duty amount involved was slightly over Rs. 2.00 lakhs, with no penalties imposed on the appellants. Considering the absence of significant grounds or urgency for early disposal, the Tribunal rejected the application. The decision indicated that the appeal would proceed in its regular course without expedited treatment, as the appellants did not present a compelling case for prioritized resolution.