2005 (1) TMI 281 - AT - Central Excise

Summary

Issues: Applications for waiver of pre-deposit of Central Excise duties and penalties.

Analysis:
1. Benefit of Notification No. 14/02-C.E., dated 1-3-2002: The applicants sought waiver of pre-deposit based on the benefit of Notification No. 14/02-C.E., which provides a concessional rate of duty for fabrics made from textile fabrics where appropriate excise duty has been paid. The dispute arose as the Department contended that the fabrics processed by the applicants were not duty paid, while the applicants argued that the yarn used had already suffered duty, satisfying the notification's condition.

2. Board's Circular and Ministry's Letter: The applicants relied on Board's Circular No. 680/71/02 CX., dated 10-12-2002, which they claimed supported their case. However, the Department argued that the circular was not applicable to the applicants as they were engaged in processing on a job work basis, not as a composite mill. Additionally, the Ministry's letter F. No. 16/3/2002 was referenced by the applicants to show the Government's prima facie view that duty was not chargeable on certain fabrics during a specific period.

3. Decision and Order: After considering the submissions, the Tribunal found that the applicants failed to demonstrate that the fabrics processed had indeed suffered appropriate duty as required by the notification. The letter circulated by the Government did not provide conclusive support to the applicants' case. Consequently, the Tribunal directed each applicant to deposit 25% of the confirmed duty amount within eight weeks, with the remaining duty and penalties waived during the appeal's pendency. The next compliance report was scheduled for 29-3-2005.

This judgment by the Appellate Tribunal CESTAT, New Delhi addressed multiple applications seeking waiver of pre-deposit of Central Excise duties and penalties. The dispute centered around the interpretation of Notification No. 14/02-C.E. and whether the fabrics processed by the applicants had suffered appropriate duty as mandated by the notification. The Tribunal considered arguments related to Board's Circular and Ministry's letter but ultimately found that the applicants had not established a prima facie case for full waiver of pre-deposit. Consequently, a partial deposit was ordered, with the remaining duty and penalties subject to waiver during the appeal process.