Waiver of Duty & Penalty Granted by Appellate Tribunal

The Appellate Tribunal CESTAT KOLKATA granted the appellant a waiver of pre-deposit of duty and penalty amounting to Rs.10.01 Lakhs imposed under Section 11AC of the Central Excise Act, 1944. The Tribunal found that the appellant had a prima facie case for the total waiver of the dues adjudged as the duty on the goods had already been paid by another party, M/s Khadim Shoe Pvt. Ltd. As a result, the pre-deposit of the dues was waived, and the recovery was stayed pending the appeal.

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Issues:
- Waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944.

Analysis:
The appeal before the Appellate Tribunal CESTAT KOLKATA involved an application for the waiver of pre-deposit of duty amounting to Rs.10.01 Lakhs and an equal penalty imposed under Section 11AC of the Central Excise Act, 1944. The appellant, engaged in the manufacture of unbranded shoes, had cleared the entire quantity of shoes to M/s Khadim Shoe Pvt. Ltd. The Department issued a demand notice treating the goods as branded, denying the benefit of a specific notification. The appellant argued that the demand was confirmed based on exceeding the exemption limit, not the brand name issue raised in the show cause notice. It was highlighted that M/s Khadim Shoe Pvt. Ltd. had already paid the duty on the goods manufactured by the appellant, and the duty should not be recovered again from the appellant.

The Revenue did not dispute that M/s Khadim Shoe Pvt. Ltd. had paid the duty on the goods but contended that the duty should have been paid by the appellant as the manufacturer. After hearing both sides and examining the records, the Tribunal observed that the initial issue in the notice was the denial of the exemption to the appellant as a manufacturer of branded shoes. However, the demand was confirmed based on exceeding the exemption limit, not the brand name issue. It was noted that the duty on the goods had already been paid by M/s Khadim Shoe Pvt. Ltd., a fact undisputed by the Revenue. Consequently, the Tribunal found that the appellant had a prima facie case for the total waiver of the dues adjudged. Therefore, the pre-deposit of the dues was waived, and the recovery was stayed during the pendency of the appeal. The decision was pronounced in an open court by Dr. D. M. Misra of the Appellate Tribunal CESTAT KOLKATA.

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