1998 (9) TMI 180 - AT - Central Excise

Summary

Issues:
1. Stay application for waiver of pre-deposit of duty and penalty imposed by the Commissioner of Central Excise.
2. Duty demands raised on various grounds including excess recovery of insurance, FSE salary, forwarding charge, excess freight recovery, monsoon packing, 2-T oil supply, shared advertising, retention charges, and cost of form.
3. Justification of demands by the applicant on the grounds of legal tenability and Supreme Court rulings.
4. Invocation of extended period under Section 11A and refund due to the applicants.
5. Concession by the learned SDR on legal position favoring the applicants.
6. Prima facie case in favor of the applicants and entitlement to refund.

Analysis:
1. The stay application was filed by LML Limited seeking a waiver of pre-deposit of duty amounting to approximately Rs. 30 lakhs and a penalty of Rs. 20 lakhs imposed by the Commissioner of Central Excise, Kanpur-I. The duty demands were raised on various grounds, including excess recovery of insurance, FSE salary, forwarding charge, excess freight recovery, monsoon packing, 2-T oil supply, shared advertising, retention charges, and cost of form.

2. The applicant contested the demands, arguing that they were not justified as the costs included were not legally tenable. They cited Supreme Court rulings to support their arguments, such as the case of Baroda Electric Meters v. Collector of Central Excise and Philips India Ltd. v. C.C.E. The applicant also challenged the invocation of the extended period under Section 11A and claimed a refund due to them based on re-assessment orders.

3. The learned SDR representing the respondent conceded that the legal position, as per Supreme Court and CEGAT decisions, favored the applicants, particularly regarding the levying of duty on excess recovery of insurance, shared advertising cost, retention charges, and pre-registration check charges. After perusing the submissions and records, the Tribunal found that the applicants had a strong prima facie case on most grounds of demand and were entitled to a refund based on re-assessment orders.

4. Consequently, the Tribunal decided to waive the pre-deposit of duty and penalty, staying the recovery during the pendency of the appeals. The decision was based on the strength of the applicant's case and their entitlement to a refund as per the re-assessment orders issued by the CEGAT.