Tribunal denies duty waiver for footwear manufacturers; affixing stickers not sufficient

The Tribunal dismissed the early hearing of stay applications as infructuous. The applicants, engaged in footwear manufacturing, sought waiver of duty, interest, and penalties amounting to Rs. 7,00,000/-. The demand was confirmed due to incorrect availing of concessional duty rates under Notification No. 5/2006-C.E. The Tribunal held that affixing stickers with MRP did not meet the Notification's requirement of indelible marking on the footwear. The applicants were directed to deposit Rs. 2,00,000/- within four weeks, with the remaining amount waived. Recovery was stayed pending appeal, subject to compliance by a specified date.

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Issues:
- Early hearing of stay applications
- Waiver of total demand of duty, interest, and penalties
- Interpretation of Notification No. 5/2006-C.E.

Early Hearing of Stay Applications:
The applicants filed applications for early hearing of stay applications, which were dismissed as infructuous since the stay applications were listed for hearing on the same day. The common issue in all applications was considered, and they were taken up together for consideration.

Waiver of Total Demand of Duty, Interest, and Penalties:
The applicants, engaged in the manufacture of footwear, sought waiver of a total demand of duty amounting to Rs. 7,00,000/-, interest, and penalties. The demand was confirmed due to part of the footwear production being cleared to industrial consumers, making it assessable to duty under Section 4 of the CEA. Additionally, the applicants were found to have wrongly availed the benefit of Notification No. 5/2006-C.E. for concessional duty rates. The applicants argued that they correctly paid duty based on the MRP marked on the footwear and that affixing stickers displaying the MRP entitled them to the Notification's benefits. However, the Revenue contended that the MRP had to be indelibly marked or embossed on the footwear itself to qualify for the Notification's benefits.

Interpretation of Notification No. 5/2006-C.E.:
The Tribunal found that the applicants were indeed availing the benefit of Notification No. 5/2006, which required the retail sale price to be indelibly marked or embossed on the footwear itself. Since the applicants admitted to only affixing stickers displaying the MRP, they did not fulfill the conditions of the Notification. Consequently, the Tribunal directed the applicant to deposit Rs. 2,00,000/- within four weeks. Upon this deposit, the remaining amount of duty, interest, and penalties was waived, and recovery of the same was stayed during the appeal's pendency. Compliance was required to be reported by a specified date.

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