2009 (7) TMI 1008 - AT - Central Excise

Stay/Dispensation of pre-deposit - Captive consumption, exemption under Notification No. 67/95-C.E. - Assessee using scrap of brass and copper, manufactures biffets, untrimmed sheets and trims same - These trimmed sheets and circles used for manufacture of handicrafts and utensils

Summary

Issues:
1. Eligibility for benefit of Notifications No. 1/93, 67/95, and 134/94.
2. Treatment of waste arising from the trimming process.
3. Financial hardship faced by the company.

Eligibility for benefit of Notifications:
The case involved a demand of Rs. 1,75,78,342 for the period January 1996 to December 1996. The Commissioner (Appeals) modified the initial demand, holding that the appellant was not eligible for the benefit of notifications No. 1/93 and 67/95, resulting in a higher duty demand. The advocate argued that if the appellant did not avail the Modvat credit during the period, they would be eligible for the benefit of Notification 134/94, reducing the duty demand significantly. The Tribunal noted that the appellant should be eligible for the benefit of Notification No. 67/95, and the demand of Rs. 23 lakh on this ground was deemed unsustainable. However, the Tribunal found that the appellant did not make a strong case for waiving the entire demand, except for the Rs. 23 lakh related to Notification No. 67/95.

Treatment of waste arising from the trimming process:
The Commissioner treated waste from the trimming process of untrimmed sheets and circles as another final product, leading to the conclusion that the appellant was not eligible for the benefit of Notification No. 67/95 for untrimmed sheets. The advocate argued that this conclusion was incorrect and that if this exemption was granted, no demand would remain. Additionally, a substantial portion of the demand raised by the show cause notice, amounting to Rs. 2.7 crores, was considered time-barred.

Financial Hardship faced by the company:
The company claimed to be facing financial hardship, despite making a profit of Rs. 30 lakh in the financial year 2007-08. The advocate highlighted that a significant deposit would impact the company's profitability. Considering the financial hardship pleaded by the company, the Tribunal directed the applicant-company to deposit Rs. 50 lakhs within 8 weeks and waived the pre-deposit of the balance amount of duty, interest, and penalties on both applicants, with recoveries stayed until the appeals were disposed of. The Tribunal clarified that these observations were solely for deciding the stay applications.

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