2012 (2) TMI 426 - AT - Central Excise

Waiver and Stay Granted for Central Excise Duty and Penalty

The Tribunal granted waiver and stay for Central Excise duty and penalty amounts demanded based on similarities with a previous case involving ... Waiver of pre-deposit - stay of recovery - prima facie case - simultaneous availing of Central Excise and Customs notifications - benefit under Notification No. 43/2001-C.E. (N.T.) - condition No. 8 of customs notification - advance licence export obligationWaiver of pre-deposit - stay of recovery - prima facie case - benefit under Notification No. 43/2001-C.E. (N.T.) - simultaneous availing of Central Excise and Customs notifications - Whether waiver of pre-deposit and stay of recovery in respect of the demand of excise duty and penalty should be granted to the appellant - HELD THAT: - On a prima facie appraisal the packing materials in question were procured duty-free under Notification No. 43/2001-C.E. (N.T.) and used in relation to exports under advance licences for which inputs were imported duty-free under the customs notification. Any breach of the customs notification would prima facie attract customs duty on the imported materials; Revenue does not allege that the packing materials were procured indigenously in breach of the procedure under Notification No. 43/2001. The Central Excise notification relied upon by the appellant does not on its face refer to the customs exemption notification and there is a comparable stay order of this Bench in Nuthatech Nutricare Technologies v. CCE which dealt with a similar contention that both notifications could not be denied simultaneously. In view of these factors the Bench found a prima facie case favouring the appellant and, following the precedent, granted waiver of pre-deposit and a stay of recovery of the duty and penalty challenged in the application.Waiver of pre-deposit and stay of recovery in respect of the demanded excise duty and the penalty are granted.Final Conclusion: The application for waiver of pre-deposit and stay is allowed on prima facie grounds for the period 9-5-2005 to 20-10-2008; the related miscellaneous application for out-of-turn disposal is dismissed as infructuous. Issues:Waiver and stay application for Central Excise duty and penalty based on Notification No. 43/2001-C.E. (N.T.) and customs Notification No. 94/2004.Analysis:The appellant filed an application seeking waiver and stay for Central Excise duty of Rs. 95,82,497/- demanded for a specific period along with an equal amount of penalty. The duty demand was related to packing materials procured duty-free under Notification No. 43/2001-C.E. (N.T.) and used for exporting textile garments under advance licenses with duty-free imported fabrics under customs Notification No. 94/2004. The demand was made on the ground that the appellant could not have availed benefits of both notifications simultaneously. The condition No. 8 of the customs notification was invoked, emphasizing the discharge of export obligation within a specified period. The appellant argued that the benefit under Rule 19 of the Central Excise Rules, 2002 was for packing materials, not the exported products, hence no violation of condition No. 8 could be attributed to them.The Additional Commissioner interpreted condition No. 8 to support the allegations in the show cause notice and the impugned order. The appellant referenced a previous Stay Order where waiver and stay were granted for a similar issue of simultaneous benefit availing under two notifications. The Tribunal considered the factual aspects but focused on the violation of customs notification conditions leading to a demand for customs duty on imported materials. Since there was no evidence of procuring packing materials domestically without following the procedure under Notification No. 43/2001-C.E. (N.T.), the appellant was granted waiver and stay based on the cited Stay Order.The Tribunal found that the appellant could claim waiver and stay due to the similarities with the previous case, leading to the waiver and stay being granted for the duty and penalty amounts. The miscellaneous application for out-of-turn disposal of the stay application was dismissed as infructuous.