1999 (12) TMI 352 - AT - Central Excise

Summary

Issues:
Application for waiver of deposit of duty and equivalent penalty under rule 57-I(4) - Interpretation of Rule 57Q regarding credit restriction on imported goods - Applicability of extended period for invoking restriction - Consideration of credit under Rule 57A - Prima facie case on merits and limitation - Early hearing request.

Analysis:
The case involves an application seeking waiver of deposit of duty and penalty under rule 57-I(4) concerning duty demanded on imported steel plates, tubes, pipes, and castings for use in manufacturing machines. The dispute arises from the invocation of sub-rule (3) in Rule 57Q, limiting credit to 75% of additional duty paid. The applicant argues that the goods are not capital goods, and credit was not taken under Rule 57Q, contending that the extended period is inapplicable. The department asserts that sub-rule (3) restricts credit for goods under Heading 98.01, irrespective of being capital goods. The legal issue arises from the classification under Heading 98.01, which includes components and raw materials, potentially affecting the credit restriction under Rule 57Q.

The complexity deepens when considering credit under Rule 57A, as sub-rule (3) of Rule 57Q does not mention Rule 57A, implying credit under Rule 57A may remain unaffected. The applicant's long-standing credit claim under Rule 57A, dating back to 1986, strengthens their case. The Tribunal acknowledges the applicant's strong prima facie case on merits and limitation, indicating a bona fide belief in credit availability. The absence of suppression or misdeclaration of facts, along with supporting orders from appellate authorities, favors the applicant's position. Consequently, the Tribunal waives the deposit of the remaining duty and penalty, staying its recovery.

Additionally, the advocate's request for early hearing due to the recurring nature of the issue is considered, with no opposition from the departmental representative. The appeal is scheduled for a hearing on 25-1-2000, reflecting the Tribunal's willingness to address the matter promptly. The judgment highlights the intricate legal interpretation of rules governing duty deposits and credit restrictions on imported goods, emphasizing the importance of a bona fide belief in credit entitlement and the prima facie strength of the applicant's case.