Tribunal orders additional predeposit for duty, allows waiver on compliance

The Tribunal directed the applicant to make a further predeposit of Rs. 3,00,000 within eight weeks under Rule 8(3A) of the Central Excise Rules, 2002, for duty on goods cleared between March 2011 to July 2011. The balance dues were waived upon compliance, and recovery was stayed during the appeal period due to the applicant's financial difficulties and partial payment already made. The Tribunal's decision considered the specific requirement of cash/PLA payment for default periods under Rule 8(3A) for each consignment at the time of removal.

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Issues: Application for waiver of predeposit of duty under Rule 8(3A) of the Central Excise Rules, 2002.

Analysis:
1. The applicant sought waiver of predeposit of duty amounting to Rs. 11,11,194/- along with interest and penalty for the Central Excise duty on goods cleared between March 2011 to July 2011, to be paid in cash/PLA under Rule 8(3A) of the Central Excise Rules, 2002.

2. The applicant's counsel argued that the entire amount had been reversed from the CENVAT account in compliance with Rule 8(3A). Additionally, a partial payment of Rs. 2,36,106/- had already been made, citing financial difficulties due to significant losses and layoff status. Reference was made to a previous Tribunal case granting partial stay on predeposit.

3. The Revenue's representative contended that the Karnataka High Court decision in Manjunatha Industries case established that duty under Rule 8(3A) must be paid through account current for each consignment at the time of removal. Citing Tribunal and Madras High Court decisions, it was argued that the applicant should deposit the entire duty amount along with interest based on settled precedents.

4. Upon review, it was noted that the Karnataka High Court ruling clarified that duty payment under Rule 8(3A) is specific to each consignment at the time of removal, requiring cash/PLA payment for default periods. Considering the applicant's financial situation and partial payment, the Tribunal directed a further predeposit of Rs. 3,00,000/- within eight weeks, with balance dues waived upon compliance, and recovery stayed during the appeal period.

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