2014 (6) TMI 853 - AT - Central Excise

Appellate Tribunal Grants Stay on Recovery of Dues Emphasizing Substance over Procedure.

The Appellate Tribunal CESTAT Ahmedabad ruled in favor of the appellant, granting a stay on the recovery of confirmed dues and penalties. The judgment ... GAS project - goods cleared from one unit whereas the PAC issued was in the name of appellant’s other unit. - facilities to maintain Butt Weld Fittings - Clearance of certain pipe fittings for the project ‘Neelam Heera Reconstruction Project’ and ‘North Tapti Project’ under Project Authority Certificate (PAC) without payment of duty as per the provisions of Notification No. 6/2006-C.E., dated 1-3-2006 - non-admissibility of exemption under Notification No. 6/2006-C.E. - Held that:- wrong mentioning of address in the PAC was only due to typographical mistake. A procedural mistake cannot be made the basis for denying substantive right when such a manufacturing facility is not available at their Makarpura unit of the appellant. As the details of the same are required to be gone into at the time of final hearing, prima facie appellant has made out a case for complete waiver of the stay. Accordingly, there shall be stay from recovery of confirmed dues and penalties till the disposal of the appeal - Stay granted. Issues Involved:Appeal against OIA for stay of confirmed dues - Clearance of pipe fittings under Project Authority Certificate without duty payment - Non-admissibility of exemption under Notification No. 6/2006-C.E. - Discrepancy in unit address mentioned in PAC.Analysis:1. Appeal Against OIA for Stay of Confirmed Dues:The appellant filed an appeal against the Order-in-Original (OIA) for the stay of confirmed dues related to the clearance of pipe fittings for specific projects without payment of duty. The issue revolved around the non-admissibility of exemption under Notification No. 6/2006-C.E. The appellant had two manufacturing units, and the demand was based on the discrepancy in availing the exemption for goods produced in one unit while the Project Authority Certificate (PAC) was issued in the name of the other unit.2. Clearance of Pipe Fittings Under Project Authority Certificate:The appellant argued that the facilities to produce the supplied Butt Weld Fittings under the PAC were only available in their unit at a specific location, and the mention of a different unit's address in the PAC was a typographical error. The appellant contended that the address discrepancy was a procedural irregularity and did not affect the substantive right to claim exemption under the notification. The appellant's case for complete waiver of the stay was considered valid as the manufacturing facility was not available at the unit mentioned in the PAC.3. Non-Admissibility of Exemption Under Notification No. 6/2006-C.E.:The Commissioner's findings were reiterated by the learned A.R., emphasizing the non-admissibility of the exemption under the notification for the goods cleared by the appellant. However, the Tribunal observed that the typographical error in mentioning the unit's address in the PAC should not be a basis for denying the substantive right to claim exemption when the actual manufacturing facility was not present at that unit. The Tribunal acknowledged that the details of the manufacturing facility would be examined during the final hearing, indicating a prima facie case for granting a stay on the recovery of dues and penalties until the appeal's disposal.In conclusion, the Appellate Tribunal CESTAT Ahmedabad ruled in favor of the appellant, granting a stay on the recovery of confirmed dues and penalties. The judgment highlighted the importance of substantive rights over procedural irregularities, especially when the actual manufacturing facility's availability was a crucial factor in determining the exemption eligibility under the notification.