1998 (9) TMI 181 - AT - Central Excise

Summary

Issues:
- Stay application for waiver of pre-deposit of duty and penalty imposed by the Commissioner of Central Excise, Kanpur-I.
- 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.
- Justification of demands by the applicant on legal grounds.
- Invocation of extended period under Section 11A.
- Refund due to the applicants from the Commissioner.
- Legal position favoring the applicants as per Supreme Court and CEGAT decisions.
- Prima facie case in favor of the applicants for most grounds of demand.

Analysis:
The judgment pertains to a stay application filed by LML Limited seeking a waiver of pre-deposit of duty and penalty amounting to approximately Rs. 30 lakhs and Rs. 20 lakhs, respectively, 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.

The applicant contested the demands, arguing that they were not legally tenable. They cited specific reasons for each demand, such as the excess recovery of insurance charges being unjustified due to adjustments against transportation charges, and the inclusion of certain costs being contrary to established legal precedents, including Supreme Court decisions. The applicant also challenged the invocation of the extended period under Section 11A and claimed a refund due to them from the Commissioner based on a reassessment order.

In response, the learned SDR conceded that the legal position favored the applicants concerning several aspects of the demands, acknowledging the support of Supreme Court and CEGAT decisions. Upon reviewing the submissions and considering both sides, the tribunal found that the applicants had a strong prima facie case for most of the grounds of demand. Consequently, the tribunal granted the waiver of pre-deposit of duty and penalty, staying the recovery during the pendency of the appeals. This decision was based on the applicants' strong case and entitlement to a refund following a reassessment order by the CEGAT.