1997 (6) TMI 158 - AT - Central Excise

Tribunal Orders Pre-Deposit for Duty Dispute, Upholds Appellant's Contentions

The Tribunal ordered the appellant to make a pre-deposit of Rs. 1,00,00,000/- for one issue and Rs. 6,44,629/- for another issue, with the balance ... Stay/Dispensation of pre-deposit Issues:1. Dispensation of pre-deposit of demanded amount.2. Disallowance of deductions claimed by the appellant.3. Duty demand on taxes paid, freight, and discount.4. Related person status under Section 4 of the Central Excises and Salt Act.5. Lack of figures furnished by the appellants before the lower authority.6. Affordability of the demanded amount by the appellant.Analysis:1. The appellant sought dispensation of a pre-deposit of Rs. 5,70,28,531/- demanded due to amounts representing surcharge on various charges not allowed as abatement. The lower authority disallowed deductions due to lack of proof of actual expenditure and fixed amounts by the Oil Co-ordination Committee. The Tribunal observed that abatement should have been allowed, but as the appellant did not provide necessary figures, they ordered a pre-deposit of Rs. 1,00,00,000/- with the balance dispensed pending appeal.2. The appellant argued that the duty demand was misdirected, claiming the sales were not to a related person and taxes paid were allowable under Section 4 of the Central Excises and Salt Act. They contended that they paid more taxes than collected and should not be demanded duty on abatable elements. The Tribunal agreed with the appellant's contentions and ordered pre-deposit of Rs. 6,44,629/- for the amount involved.3. The appellant's advocate emphasized that the pricing mechanism was controlled by the Government of India, and the duty paid was based on various elements set out in the order. They referenced judgments supporting abatement of taxes paid and contended that the duty demand was not sustainable in law. The Tribunal acknowledged the appellant's arguments and ordered pre-deposit of the demanded amount.4. The appellant's plea regarding related person status under Section 4 of the Central Excises and Salt Act was considered valid by the Tribunal, and the duty demand was deemed unjustified based on the pricing arrangement controlled by the government.5. The lack of figures furnished by the appellant before the lower authority was noted by the Tribunal, and in the absence of necessary information, the duty demand was upheld. However, the Tribunal ordered a pre-deposit based on the appellant's offer.6. The affordability of the demanded amount by the appellant was debated, with the appellant's advocate reserving further arguments for the final hearing. The Tribunal considered the appellant's financial capacity and ordered pre-deposit of specified amounts to dispense with the balance pending appeal.