1995 (3) TMI 233 - AT - Central Excise

Summary

Issues: Application for waiver of duty demand and personal penalty based on interpretation of exemption notification for ingot moulds.

The judgment pertains to an application for waiver of duty demand and personal penalty amounting to Rs. 1,51,07,377.00 and Rs. 5 lakh, respectively, imposed on the applicants by the Collector of Central Excise & Customs. The dispute arises from the differential duty calculation on ingot moulds under Heading 84.54, with the Department contending that duty should be paid on ingot moulds cleared as scrap outside the factory. The applicants argued that the ingot moulds, used in their factory and later cleared as scrap, were declared correctly in their classification list and R.T. 12 returns. They claimed differing interpretations of the exemption condition in Notification 54/86, asserting no suppression of facts to warrant invoking Section 11A of the Central Excises and Salt Act, 1944 for a longer duty demand period.

The Department, represented by the ld. D.R., opposed the stay, alleging suppression of facts by the applicants in declaring their product as defective moulds cleared as scrap outside the factory. The D.R. highlighted the wording of the notification, stating that defective moulds cleared as such outside the factory do not qualify for the exemption. Referring to the Collector's order, the D.R. emphasized the responsibility of the applicants, working under Record Based Control, to accurately declare goods and determine duty. Citing legal precedents, the D.R. argued in favor of invoking a longer period under Section 11A based on mis-declaration detected by the Department.

After considering arguments from both sides, the Tribunal found the interpretation of the exemption condition for ingot moulds to be a contentious issue. While acknowledging the arguable nature of the Department's contention on suppression of facts due to the classification list entries, the Tribunal emphasized the primary issue of interpreting the exemption condition's wording. Given that the applicants were a public sector undertaking of the Government of India, the Tribunal directed a deposit of Rs. 75 lakh out of the duty demand by a specified date, with the balance amount and penalty pre-deposit being dispensed with upon compliance. The matter was scheduled for further review to ensure compliance with the deposit directive.