2000 (6) TMI 242 - AT - Central Excise

Issues:
1. Waiver of pre-deposit of duty and penalty confirmed by the Commissioner, Central Excise.
2. Interpretation of Notification No. 214/86-CE and Notification No. 84/94 in relation to duty liability.
3. Application of extended period of limitation under Section 11A of the Central Excise Act.
4. Financial hardship claimed by the appellant.

Analysis:

Issue 1: Waiver of pre-deposit
The appellant, a manufacturer of C.I. Castings and parts, sought waiver of pre-deposit of duty and penalty imposed by the Commissioner. The appellant argued that the demand for central excise duty was beyond the statutory time limit specified in Section 11A of the Act. The appellant contended that they had disclosed all relevant information to the Department and had not suppressed any facts. They relied on a precedent where duty liability fell on the supplier of raw material, not the job worker. However, the Department opposed the waiver, stating that the duty liability was on the manufacturer of the goods. The Tribunal held that the appellant had not made out a prima facie case for waiver of the entire amount of duty and penalty. The Tribunal directed the appellant to deposit a portion of the duty and penalty within a specified time frame, with a stay on recovery of the remaining amount during the appeal.

Issue 2: Interpretation of Notification No. 214/86-CE and Notification No. 84/94
The dispute revolved around the interpretation of Notification No. 214/86-CE and Notification No. 84/94 concerning duty liability. The appellant argued that under Notification No. 214/86, the duty liability rested with the supplier of raw material, not the job worker. They cited a case precedent to support their argument. The Department contended that the liability of discharging central excise duty lay with the manufacturer of the goods. The Tribunal observed that the liability under Notification No. 214/86 pertained to the final product, not goods manufactured on a job work basis. The Tribunal considered the submissions and directed the appellant to deposit a specified amount towards duty and penalty.

Issue 3: Application of extended period of limitation
The appellant raised the issue of the extended period of limitation under Section 11A of the Central Excise Act. They argued that the demand for central excise duty was beyond the prescribed time limit. The Department maintained that the extended period of limitation was applicable for demanding central excise duty. The Tribunal noted that the issues regarding the invokability of the extended period of limitation and duty liability would be examined in detail during the appeal hearing. However, they directed the appellant to deposit a portion of the duty and penalty within a specified timeframe.

Issue 4: Financial hardship claimed by the appellant
The appellant pleaded financial hardship, highlighting their fixed assets' value and emphasizing the potential undue hardship if asked to pay the demanded duty and penalty. The Department pointed out the appellant's high sales turnover. The Tribunal considered the financial aspects but concluded that no financial hardship would be caused by requiring the appellant to deposit a specific amount towards duty and penalty, with a stay on recovery of the remaining amount during the appeal.

In conclusion, the Tribunal partially granted the appellant's request for waiver of pre-deposit, directing them to deposit specified amounts towards duty and penalty, with a stay on recovery of the remaining sums during the appeal process.

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