2014 (2) TMI 852 - AT - Central Excise

Waiver of pre deposit - Demand of Special Additional Duty - Reversal of the CENVAT credit - Held that - Prima facie, the appellants have made out a case inasmuch as it has not been specifically held by the adjudicating authority that the price shown in the domestic sale invoices produced by the assessee did not incorporate therein the element of SAD. The adverse findings recorded against the assessee appear to be consequential to lack of correlation and are not based on to total rebuttal of the assessee s contention. In this view of the matter, we take into account the consistent claim of the appellants to have paid more duty than the sum total of CVD and SAD paid on the imported goods, at the time of domestic sale clearances - Hence there will be waiver and stay as prayed for - Stay granted.

Issues:
1. Demand of Special Additional Duty (SAD) confirmed under the Proviso to Section 11(A1) of the Central Excise Act for the period from October 2005 to November 2008.
2. Claim by the appellants that goods imported were not removed as such but only after the manufacturing process.
3. Allegation that no element of SAD was separately shown in the invoices.
4. Dispute regarding the amount of CENVAT credit paid as excise duty on goods at the time of clearance after importation.

Analysis:

1. The judgment deals with the demand of Special Additional Duty (SAD) amounting to Rs. 64,20,716/- confirmed under the Proviso to Section 11(A1) of the Central Excise Act for the period from October 2005 to November 2008. The impugned demand was based on goods imported by the appellants and found to have been cleared without reversal of the CENVAT credit taken of SAD. The appellants contended that the imported goods were not removed as such but only after undergoing the manufacturing process. However, the adjudicating authority upheld the show-cause notice allegation that the imported goods were indeed removed as such without reversal of CENVAT credit, leading to the demand in question.

2. The appellants argued that more than the amount of CENVAT credit was paid as duty of excise on the goods at the time of clearance after importation. The Addl. Commissioner(A.R.) countered this claim by stating that the appellants failed to establish this before the adjudicating authority. The documents produced by the appellants to correlate duty particulars in the Bills of Entry with those in domestic sale invoices were referred to, but the show-cause notice alleged that no element of SAD was separately shown in the invoices. Despite the adjudicating authority not accepting the appellant's claim outright, the Tribunal found that the appellants had made a prima facie case. The Tribunal observed that the adverse findings against the appellants were due to a lack of correlation and not a total rebuttal of their contention. Therefore, the Tribunal granted waiver and stay, allowing the appellants an opportunity to correlate the duty payments at the final hearing stage.

3. The allegation that no element of SAD was separately shown in the invoices was a crucial point of contention. The Tribunal noted that the adjudicating authority did not specifically hold that the price shown in the domestic sale invoices did not include the element of SAD. This lack of specific finding led the Tribunal to consider the consistent claim of the appellants that they had paid more duty than the sum total of CVD and SAD on the imported goods at the time of domestic sale clearances. As a result, the Tribunal granted waiver and stay, including for the penalties imposed on the company's functionaries, based on the appellants' contentions and the lack of total rebuttal by the adjudicating authority.

This comprehensive analysis covers the key issues and arguments presented in the judgment, highlighting the Tribunal's considerations and decisions regarding the demand of Special Additional Duty, the claims made by the appellants, and the lack of specific findings by the adjudicating authority.

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