2014 (1) TMI 1158 - AT - Central Excise

Tribunal Waives Pre-Deposit in Appeals, Stresses Legal Principles

The Tribunal, recognizing the binding nature of a Larger Bench decision, waived the pre-deposit condition in three cases and scheduled the appeals for ... Dutiable as well as non-dutiable products manufactured – Waiver of Pre-deposit – Held that:-The appellants were manufacturing dutiable as well as exempted final products and were using common modvatable inputs, after availing Cenvat credit - Following Unison Metals Ltd. Vs. CCE [2006 (10) TMI 171 - CESTAT, NEW DELHI]- 8% amount paid in terms of Rule 6 and collected from the buyers would not attract the provisions of Section 11D inasmuch as the amount collected from the buyer already stands deposited with the Revenue – the condition of pre-deposits waived till the disposal – Stay granted. Issues:Recovery of duty on collected amount from clients for exempted products.Analysis:The judgment revolves around the issue of the Revenue seeking to recover duty on the amount paid by the appellants for exempted products, which they collected from their clients. The Tribunal referred to a Larger Bench decision in the case of Unison Metals Ltd. Vs. CCE -2006, where it was held that the amount collected from buyers in compliance with Rule 6 does not attract Section 11D since it has already been deposited with the Revenue. Despite the appellant citing this precedent, the Commissioner disregarded it, leading to the demand being confirmed without considering the legal position established by the Larger Bench. The Tribunal emphasized that decisions by Larger Benches are meant to settle the law and prevent multiple proceedings at lower levels. The Commissioner was obligated to adhere to the established legal principle rather than causing inconvenience to the assessee.The Tribunal, after acknowledging the binding nature of the Larger Bench decision, waived the pre-deposit condition in all three cases and scheduled the appeals for final disposal on a specific date. Additionally, miscellaneous applications for early hearing of stay petitions were also addressed and disposed of during the proceedings. The judgment underscores the importance of following established legal precedents to ensure consistency and fairness in decision-making processes within the jurisdiction of the Tribunal.