CESTAT grants waiver of predeposit for duty and penalty under Central Excise Act

The Appellate Tribunal CESTAT, CHENNAI granted the waiver of predeposit of duty amounting to Rs. 10,34,464 confirmed under Notification No. 6/2002-CE for the appellant. The Tribunal also waived an additional amount of Rs. 45,70,283 confirmed under section 11D of the Central Excise Act and a penalty of Rs. 10,34,464. The Tribunal found a strong prima facie case for waiver based on evidence that the water was treated for human consumption before being conveyed to storage tanks. The Tribunal granted the waiver and stayed the recovery during the appeal process.

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Issues: Application for waiver of predeposit of duty; Benefit of exemption under Notification No. 6/2002-CE; Confirmation of duty and penalty; Prima facie case for waiver; Interpretation of Notification requirements; Tribunal's decision applicability.

The judgment by the Appellate Tribunal CESTAT, CHENNAI, involved a case where the appellant sought waiver of predeposit of duty amounting to Rs. 10,34,464 confirmed due to the denial of exemption under Notification No. 6/2002-CE dated 1-3-2002, along with an additional amount of Rs. 45,70,283 confirmed under section 11D of the Central Excise Act, and a penalty of Rs. 10,34,464. The Tribunal considered the issue of whether pre-stressed concrete pipes manufactured by the appellant, which delivered water from the source to storage tanks, met the requirements of the Notification which mandated delivery to a water treatment plant and then to a storage facility. The Tribunal noted the appellant's submission supported by a certificate from the District Collector, confirming that the water was treated for human consumption before being conveyed to storage tanks. The Tribunal found a strong prima facie case for waiver of predeposit based on this evidence and granted the waiver for the mentioned amount.

Regarding the larger demand and penalty, the Tribunal acknowledged the appellant's argument that the amount in question did not represent any duty collected and that no additional amount was collected beyond the contract price. Citing a precedent in Texmaco Limited v. CCE, Kolkata - 2008 (228) E.L.T. 146, the Tribunal found merit in the appellant's case for waiver of this amount and the penalty as well. Consequently, the Tribunal granted the prayer for waiver of predeposit and stayed the recovery during the appeal process. The judgment was delivered by Ms. Jyoti Balasundaram, Vice-President, and was represented by Shri K.S. Venkatagiri, Advocate for the Appellant, and Shri V.V. Hariharan, Jt. CDR, for the Respondent.

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