2009 (7) TMI 1102 - AT - Central Excise

Summary

Issues:
1. Liability to pay duty on transaction value under Section 4(3)(d) of Central Excise Act, 1944.

Analysis:
The judgment pertains to a stay petition challenging an order confirming duty, interest, and penalty against the applicant. The primary issue revolves around the applicant's liability to pay duty on the transaction value as per Section 4(3)(d) of the Central Excise Act, 1944. The applicant, a manufacturer of excisable goods, availed Cenvat credit on duty paid on inputs and opted for premature repayment of Sales Tax liability under a government scheme. The applicant received an abatement on Sales Tax liability, resulting in undervaluation of goods and subsequent duty short payment. A show cause notice was issued, leading to the imposition and confirmation of duty, interest, and penalty.

Upon hearing both parties, the consultant for the applicant presented a Trade Circular indicating that the abatement of sales tax was solely due to the premature payment scheme. It was argued that if the applicant had not opted for this scheme, the full sales tax amount would have been payable. Conversely, the JDR contended that the abatement of sales tax impacted the transaction value, thereby confirming duty liability. After considering the facts and circumstances, the tribunal found that the applicant established a strong prima facie case in their favor. Consequently, an unconditional waiver of pre-deposit for duty, interest, and penalty was granted, and the recovery stayed pending final disposal of the appeal.

This judgment highlights the interpretation and application of Section 4(3)(d) of the Central Excise Act, 1944 concerning duty liability on transaction value. The case underscores the importance of analyzing the specific circumstances and legal provisions governing duty payments in excise matters. The tribunal's decision to grant a waiver and stay recovery pending appeal demonstrates a balanced approach to addressing duty disputes and ensuring fair adjudication based on prima facie evidence.