2001 (3) TMI 435 - AT - Central Excise

Summary

Issues:
1. Complete waiver of pre-deposit of duty amount and stay of recovery pending appeal.
2. Rejection of abatement claim due to procedural non-compliance.
3. Scope of demand raised in the impugned order beyond the show-cause notice.
4. Requirement of financial hardship for waiver of pre-deposit.
5. Fulfillment of mandatory requirements under Rule 96ZO(2).
6. Direction to deposit a part of the duty amount under Section 35F of the Act.

Analysis:

1. The appellants sought complete waiver of pre-deposit of duty amount and stay of recovery pending appeal. They were involved in the manufacture of non-alloy steel Ingots/Billets under a compounded levy scheme. The factory was closed due to adverse market conditions, and upon restarting, they applied for abatement of duty. The Commissioner rejected the abatement claim and directed payment of Rs. 1,29,032/-, leading to the present appeal and stay application.

2. The main contention was the rejection of the abatement claim due to alleged procedural lapses. The Commissioner cited non-compliance with Rule 96ZO(2)(e) regarding the declaration of continuous closure. The applicants argued that the requirement was substantially met through a letter. However, the rejection was based on this ground, leading to the demand for payment.

3. The issue of the scope of the demand raised in the impugned order was raised. The demand for duty was not explicitly mentioned in the show-cause notice, raising concerns about exceeding the notice's scope. However, it was clarified that the demand was under the proviso to Rule 96ZO(3) and not Section 11A of the Act, linked to the abatement claim rejection.

4. The aspect of financial hardship for waiving pre-deposit was discussed. The applicants did not assert financial difficulties in their plea for complete waiver. The Tribunal noted this omission in conjunction with other factors while deciding the deposit amount.

5. Fulfillment of mandatory requirements under Rule 96ZO(2) was crucial. The Commissioner's rejection of the abatement claim was upheld as the clause (e) requirement was not met. The Tribunal considered this procedural aspect in determining the deposit obligation.

6. Finally, the Tribunal directed the applicants to deposit Rs. 50,000 within six weeks under Section 35F of the Act, considering various factors such as procedural compliance and financial circumstances. The decision balanced the interests of the parties involved while upholding the legal framework governing duty payments and abatement claims.