2006 (11) TMI 397 - AT - Central Excise

Tribunal Grants Waiver of Pre-Deposit for Duty & Penalty in Exemption Benefits Case

The Tribunal granted the waiver of pre-deposit of duty and penalty in a case concerning the denial of exemption benefits under Notification No. ... Stay/Dispensation of pre-deposit - Interpretation of statute Issues:1. Application for waiver of pre-deposit of duty and penalty.2. Denial of benefit of exemption under Notification No. 3/2004-C.E. and Notification No. 6/2002-C.E.3. Classification of goods as machinery or complete plant.4. Consideration of goods as Effluent Treatment Unit under Notification No. 6/2002.5. Comparison with previous judgments for extending benefit under Notification No. 6/2002.The judgment pertains to an application for the waiver of pre-deposit of duty amounting to Rs. 43,50,096/- and a penalty of Rs. 5 lakhs. The dispute revolves around the denial of the benefit of exemption under Notification No. 3/2004-C.E. and Notification No. 6/2002-C.E. concerning Rochem Disc and Tube Reverse Osmosis (DTRO) falling under Chapter Heading 84.21 of the Schedule to the CETA, 1985. The period under consideration is from March to May 2005.The issue at hand involves determining whether the goods in question qualify as machinery or complete plant for the purpose of exemption under Notification No. 3/2004. The department argues that the goods are complete plant and hence not covered by the said notification. While the applicants have failed to provide conclusive evidence to establish the nature of the goods as machinery, a certificate issued by the Maharashtra Pollution Control Board certifies the goods as an Effluent Treatment Unit with Reverse Osmosis. This certification supports the alternate claim for exemption under Notification No. 6/2002.The Tribunal scrutinizes the Commissioner's reasoning in denying the benefit under Notification No. 6/2002, citing the absence of specific facilities such as automatic sensing devices and vacuum filters. However, referencing a previous judgment involving Arvind Mills Ltd., where a similar benefit was extended without the presence of additional facilities, the Tribunal finds merit in the applicants' claim. The language of the relevant notifications aligns, leading to the conclusion that the applicants have established a prima facie case for exemption under Notification No. 6/2002.In light of the above analysis, the Tribunal grants the waiver of pre-deposit of duty and penalty, staying the recovery pending the appeal. The judgment underscores the importance of substantiating claims with relevant documentation and legal precedents to secure exemptions under the applicable notifications effectively.