Appellant ordered to pay Rs. 3,00,000 within 8 weeks, duty liability remains despite rules being ultra vires

The Tribunal directed the appellant to deposit Rs. 3,00,000 within eight weeks, with the remaining dues waived and recovery stayed during the appeal's pendency. The Tribunal found that despite the rules being considered ultra vires, the liability to pay duty under Section 3 of the Central Excise Act remained. The decision was based on the appellant's failure to pay duty on cleared goods, leading to the conclusion that a total waiver of duty was not warranted in this case.

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Issues:
1. Application for waiver of pre-deposit of duty, interest, and penalty.
2. Sustainability of proceedings due to omission of relevant section and rules.
3. Liability of manufacturers to pay duty under the Central Excise Act.
4. Determination of duty under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules.
5. Amount to be deposited by the applicant and waiver of the remaining dues.

Analysis:
The appellant filed an application seeking a waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 11,86,006. The appellant, engaged in the manufacture of processed textile fabric, failed to deposit the duty as determined under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules. The contention raised was regarding the sustainability of the proceedings due to the omission of relevant sections and rules without a saving clause. The appellant relied on the decisions of the Hon'ble Madras High Court and the Hon'ble Gujarat High Court in similar cases to support their argument.

The Revenue argued that manufacturers are liable to pay duty under Section 3 of the Central Excise Act, despite the rules being held ultra vires by the Hon'ble Madras High Court in a previous case. The Tribunal found that the appellant had cleared processed fabric without paying the determined duty, leading to the present proceedings initiated based on the order fixing the annual capacity of the stenters. The Tribunal noted that even though the rules were considered ultra vires, the liability to pay duty under Section 3 of the Central Excise Act remained. Consequently, the Tribunal directed the appellant to deposit Rs. 3,00,000 within eight weeks, with the remaining dues being waived and recovery stayed during the appeal's pendency.

In conclusion, the Tribunal held that the appellant's case did not warrant a total waiver of duty, considering the facts and circumstances. The decision was made based on the appellant's failure to pay duty on cleared dutiable goods and the liability under the Central Excise Act. The compliance for the deposit was set for a specific date to ensure timely action by the appellant.

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