1999 (3) TMI 197 - AT - Central Excise

Summary

Issues involved:
1. Confirmation of Central Excise duty under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944.
2. Imposition of penalty under Rule 173Q(1) of the rules read with Section 11 AC of the Act.
3. Application seeking waiver of deposit of sums and stay of recovery.

Analysis:

Issue 1: Confirmation of Central Excise duty under Rule 9(2) and Section 11A(2):
The Commissioner confirmed Central Excise duty and imposed a penalty under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944. The assessee had cleared levy sugar during a specific period, and the ex-factory price was fixed by the Union Government. The Supreme Court's judgment in a related case highlighted the factors to consider while fixing the price of such sugar. Following this judgment, the ex-factory price was refixed, leading to the Ministry of Food granting subsidies to sugar factories. The applicant received a subsidy, which later resulted in a notice for the recovery of a differential duty. The applicant argued against the invocation of Rule 9(2) based on previous Supreme Court judgments and similar cases where demands were dropped due to limitation issues.

Issue 2: Imposition of penalty under Rule 173Q(1) and Section 11 AC:
The Commissioner imposed a penalty under Rule 173Q(1) of the rules read with Section 11 AC of the Act. The applicant's representative cited Supreme Court findings in related cases to argue against the penalty, emphasizing that the goods were not removed clandestinely but with the knowledge of the department. The argument was supported by the observation that subsequent variations in prices fixed by the Government do not affect the liability of goods to Central Excise duty.

Issue 3: Application seeking waiver of deposit and stay of recovery:
The applicant sought a waiver of deposit of the sums confirmed and a stay of recovery. The Tribunal considered the submissions from both sides, including the applicability of Section 11A and Rule 9(2). The Tribunal found no merit in the arguments supporting the penalty and the invocation of Section 11D. After reviewing the order and relevant laws, the Tribunal concluded that the applicants presented a strong prima facie case. Consequently, the Tribunal granted an unconditional stay and waiver of the duty confirmed and the penalty imposed.

In conclusion, the Tribunal's judgment addressed the issues of Central Excise duty confirmation, penalty imposition, and the application for waiver and stay of recovery. The decision was based on the interpretation of relevant laws, previous judgments, and the specific circumstances of the case, ultimately resulting in the grant of the applicant's request for a stay and waiver.