2014 (1) TMI 1165 - AT - Central Excise

Tribunal Waives Duty, Grants Delay Condonation

The Tribunal granted condonation of delay in filing the supplementary appeal and waived the pre-deposit of total duty amounting to Rs.21,12,34,948, along ... Waiver of Pre-deposit – Held that:- Assessee contended that the default was made good by making payment through PLA along with interest by 5th July 2011 – Relying upon Solar Chemferts Pvt. Ltd. vs. CCE, Thane-I [2011 (6) TMI 640 - CESTAT, MUMBAI] - in case the default in payment of duty is made good through PLA along with interest and during the period of default cleared the goods by utilising the credit is not contrary to the provisions of Rule 8 of the Central Excise Rules hence the demand is not sustainable – Prima facie the appellant is able to made out a case in their favour – Pre-deposits waived till the disposal – stay granted. Issues:Delay in filing supplementary appeal and condonation of delay, waiver of pre-deposit of total duty, interpretation of Rule 8 of the Central Excise Rules regarding payment of duty.Delay in filing supplementary appeal and condonation of delay:The applicant filed an application for condonation of delay in filing a supplementary appeal. The appeal against the impugned order was initially filed within the normal period of limitation. However, the supplementary appeal was filed later along with the application for condonation of delay. The Tribunal condoned the delay in filing the supplementary appeal in light of these circumstances.Waiver of pre-deposit of total duty:The applicant sought waiver of pre-deposit of total duty amounting to Rs.21,12,34,948, along with interest and penalty. The demand was confirmed under Rule 8 of the Central Excise Rules, 2002, due to the applicant's alleged default in payment of duty and utilization of cenvat credit without rectifying the default. The Revenue contended that the duty must be paid consignment-wise through PLA during the default period. However, the applicant argued that the default was rectified by making payment through PLA along with interest, citing precedents to support their position.Interpretation of Rule 8 of the Central Excise Rules:The crux of the issue revolved around the interpretation of Rule 8 of the Central Excise Rules. The Revenue emphasized that during a default period, the applicant is prohibited from using cenvat credit for duty payment, justifying the demand. In contrast, the applicant relied on Tribunal decisions to argue that rectifying the default through PLA payment along with interest, while utilizing credit during the default period, does not contravene Rule 8. The Tribunal found merit in the applicant's arguments based on the cited precedents and waived the pre-deposit of dues, staying the recovery during the appeal's pendency.In conclusion, the Tribunal directed the appeals to be listed for a hearing, considering the facts, circumstances, and the significant legal issue at hand.