2014 (1) TMI 273 - AT - Central Excise

Amount received as cum-duty price or the same as assessable value Waiver of pre-deposit Held that - No bifurcation of the amount collected from the customer attributable to value and the duty payable have been mentioned - The price charged to the customer be treated as cum-duty price - the applicants are able to make out a prima-facie case for total waiver of duty pre-deposits waived till the disposal Stay granted.

Summary

Issues: Application for waiver of pre-deposit of duty. Interpretation of Notification 89/95-CE. Treatment of price charged to the customer as cum-duty price.

Waiver of Pre-deposit of Duty:
The case involved an application for the waiver of pre-deposit of duty amounting to Rs.7,71,485. The appellant, engaged in the manufacture of refined 'Palm Oil,' had availed exemption under Notification 89/95-CE dated 18.05.95 on fatty acid during the period from August 2007 to January 2008. However, based on a report from the chemical examiner, it was determined that the fatty acid was not exempted from payment of duty. Consequently, the appellant had paid the entire amount of Central Excise duty, along with interest, as they were not eligible for the exemption. The appellant argued that the price charged to the customer should be treated as cum-duty price, citing a specific amendment to Section 4 and an Explanation that supported their position.

Interpretation of Notification 89/95-CE:
The appellant had initially availed exemption under Notification 89/95-CE on the fatty acid product. However, upon subsequent disallowance of the benefit of the said Notification, the appellant had paid the entire amount of duty along with interest for the clearances of fatty acid during the relevant period. The Tribunal noted that the excise invoices provided did not contain a clear bifurcation of the amount collected from the customer, making it challenging to determine the value and duty payable. The Tribunal referred to the Explanation to Section 4, inserted from 14th May 2003, which clarified that the price-cum-duty of excisable goods sold should include the duty payable on such goods. Considering this provision, the Tribunal agreed with the appellant's argument that the price charged to the customer should be treated as cum-duty price, supporting the waiver of duty pre-deposit.

Treatment of Price as Cum-Duty Price:
The Tribunal, after reviewing the arguments presented by both the appellant's consultant and the Department's representative, found merit in the appellant's contention that the price charged to the customer should be considered as cum-duty price. This interpretation was supported by the Explanation to Section 4, which deemed the price-cum-duty to include the duty payable on the goods. Consequently, the Tribunal concluded that the appellant had made out a prima facie case for the total waiver of duty, leading to the waiver of pre-deposit and the stay of duty recovery during the appeal's pendency. The stay petition was allowed, and the decision was pronounced in open court by the Tribunal.