1997 (8) TMI 158 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of duty and penalty; Interpretation of Notification No. 75/84-C.E.; Violation of principles of natural justice; Denial of CT 2 certificates; Amount to be deposited; Early hearing request.

Interpretation of Notification No. 75/84-C.E.:
The case involves an application for waiver of pre-deposit of duty and penalty concerning the interpretation of Notification No. 75/84. The appellants, engaged in urea fertilizer manufacturing, purchased raw naphtha from Indian Oil Corporation at a concessional rate for use in generating steam and electricity, essential for ammonia and urea production. The Commissioner of Central Excise, Kanpur, contended that using naphtha for steam and electricity did not qualify for the concessional rate. The appellants argued that the raw naphtha was indeed used in fertilizer manufacturing, citing relevant case laws and the term "intended for use." They asserted that even if not entitled to the concession for electricity generation, the entire quantity procured should not be denied. The Tribunal found merit in the appellants' contentions, directing a partial deposit and granting a waiver for the remaining disputed amount.

Violation of Principles of Natural Justice:
The appellants raised concerns over the lack of a personal hearing, alleging a violation of natural justice principles by the Commissioner's ex parte order. They highlighted the hardship caused by the order, affecting their plant operations and pricing due to controlled fertilizer prices. The Tribunal acknowledged the absence of a hearing and emphasized the importance of observing principles of natural justice, noting the need for due process in such matters.

Denial of CT 2 Certificates:
The Superintendent's refusal to issue CT 2 certificates for disputed quantities further compounded the appellants' challenges, resulting in significant daily costs. The appellants sought a waiver of pre-deposit and the continuation of CT 2 certificates issuance, offering a bank guarantee. The Tribunal deferred the CT 2 certificate issue for future consideration, pending resolution of related matters and developments.

Amount to be Deposited:
In determining the deposit amount, the Tribunal considered the disputed quantity used directly in ammonia production, directing a partial deposit based on uncontested figures. Noting discrepancies in the Commissioner's decision, the Tribunal granted a full waiver for the remaining amount, citing relevant case law and the need for a balanced approach.

Early Hearing Request:
Recognizing the recurring nature of the issue and the short point at hand, the Tribunal granted an early hearing, scheduled for a specific date to expedite the resolution process. The appellants expressed readiness for an early hearing and indicated a willingness to forego immediate consideration of the CT 2 certificate matter.