1991 (4) TMI 236 - AT - Central Excise

Summary

Issues: Pre-deposit of duty amount, applicability of central excise duty on Brass Shells, interpretation of notification No. 33/81-C.E., reliance on case law, grant of stay.

Analysis:
The judgment dealt with an application seeking dispensation of the pre-deposit of duty amount of Rs. 3,18,249-27. The applicants contended that Brass Shells, an intermediate product used in torch manufacturing, were not subject to central excise duty based on a Supreme Court decision. They argued that the brass scrap emerging during Brass Shell manufacture, using duty-paid brass sheets, was exempt under Notification No. 33/81-C.E., dated 1-3-1981. The Additional Collector's decision was challenged for failure to obtain a central excise license for scrap manufacturing, which the applicants believed was unnecessary. The advocate cited a Tribunal decision in M/s. Atlas Radio's case to support their stance and requested a stay on proceedings.

The Respondent, represented by a JDR, relied on the original order but acknowledged the case law cited by the advocate, leaving the decision to the Bench's discretion. The Tribunal referenced a previous case involving CC v. Atlas Radio, emphasizing that the concessional rate under an exemption notification was not contingent on disclosing manufacturing activity to the department or following specific procedures. The Tribunal clarified that non-disclosure determined the duty demand period, not the applicable duty rate, and set-offs were not dependent on procedural compliance unless specified in the notification.

After considering the arguments and case law, the Tribunal found merit in the applicant's case on prima facie grounds. The Bench decided to dispense with the pre-deposit of duty amount, acknowledging the sub judice nature of the matter. It further directed the revenue authorities to halt recovery proceedings during the appeal's pendency. The judgment highlighted the importance of fulfilling the terms of an exemption notification for concessional rates and clarified that duty rates were independent of procedural requirements unless explicitly stated in the notification.