2014 (10) TMI 188 - AT - Central Excise

Exemption benefit under Notification No.22/2003-CE, dated 31.03.2003 - receipt of the inputs without payment of Central Excise duty under CT-3 Certificate - Held that - Main contention of the applicant is that they have cleared the final products Warp Rings , after value addition on payment of duty of ₹ 13,70,551/-. In any event, if the applicant paid duty on the inputs, they could have availed Cenvat credit on the clearances of the final products. The learned Authorised Representative on behalf of the Revenue submits that they have mis-declared the description of the final products as valve . They camouflaged of clearances of Warp Rings, which is originally displayed as a textile weaving machinery parts as manufactured by them - Prima facie, applicant procured inputs without payment of duty under CT-3 Certificate and used in the manufacture of the final products and cleared on payment of duty. It is seen that the applicant paid duty on the clearance of the finished goods, more than the amount as demanded herein - Stay granted.

Summary

Issues: Alleged wrongful availment of exemption benefit under Notification No.22/2003-CE by an EOU, misdeclaration of final products, duty payment on inputs, Cenvat credit availment, pre-deposit waiver, stay application.

The judgment pertains to an appeal by a 100% EOU engaged in manufacturing 'Valve Assemblies and Valve Parts' under Chapter 84 of CETA, 1985. The applicant allegedly availed exemption benefit under Notification No.22/2003-CE by receiving inputs without paying Central Excise duty under CT-3 Certificate, which were used in manufacturing 'Warp Rings' cleared in domestic sales. The Adjudicating authority confirmed a demand of &8377; 8.76,664/- with interest and penalty for materials procured without duty payment from May 2006 to Apr. 09. The Commissioner (Appeals) upheld the Adjudication Order.

Upon hearing both sides, it was contended that the final products 'Warp Rings' were cleared after value addition with duty payment of &8377; 13,70,551/-. The Revenue's Representative alleged misdeclaration of final products as 'valve' instead of 'Warp Rings', camouflaging the clearances. The Tribunal observed that the applicant procured inputs without duty payment under CT-3 Certificate, used them in manufacturing final products, and cleared them after paying duty. The applicant had paid duty on the finished goods clearance exceeding the demanded amount.

Consequently, the Tribunal waived the pre-deposit of duty, interest, and penalty, staying the recovery until the appeal's disposal. The stay application was allowed, providing relief to the appellant during the appeal process. The judgment emphasizes the importance of accurate declaration and payment of duties, highlighting the consequences of misrepresentation and the availability of Cenvat credit on clearances.