TaxTMI 
TaxTMI 
2010 (7) TMI 348
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....penalty of equal amount imposed on the appellant under Section 11AC ibid, upheld by the Commissioner (Appeals) vide order-in-appeal No. 606/Appl/Chd-II (JK)/2009, dated 27-10-2009 and also for stay on recovery thereof till the disposal of the appeal. The facts leading to filing of this stay application and appeal are, in brief, as under. 1.1 The appellant are engaged in the manufacture of CTD Bars, TMT Bars, Wire Rods etc. chargeable to Central Excise Duty under sub-heading 72142090 and 72044900 of the Central Excise Tariff. They are availing duty exemption under Notification No. 56/02-C.E., dated 14th November 2002 as amended. During the course of scrutiny by the audit, of the records of the appellant for October 2004 to December ....
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....nfirmed the duty demand of Rs. 10,39,166/- alongwith interest and imposed penalty of equal amount on them under Section 11AC of the Central Excise Act. On appeal to Commissioner (Appeals), the Commissioner (Appeals) vide the impugned order-in-appeal dated 27th October 2009 upheld the Additional Commissioner's order and dismissed the appeal. It is against this order that the present appeal and the stay application have been filed. 2. Heard both the sides. 2.1 Shri L.P. Asthana, Advocate, the learned Counsel for the appellant, pleaded that the dispute pertains to the period from 1st April 2003 to 31st July 2007 and during this period, even though the appellant paid duty on the FOR price, which included the element of freight....
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....ll the disposal of the appeal. 2.2 Shri B.L. Soni, learned DR, opposed the appellant's plea for waiver from the requirement of pre-deposit of duty demand, interest and penalty by reiterating the Commissioner (Appeals)'s finding in the impugned order-in-appeal and emphasized that - From the Additional Commissioner's findings in the order-in-original, it is clear that the goods had been sold at the factory gate at the price including the freight and insurance upto the customer's premises, that when the goods had been sold at the factory gate, the assessable value of the goods for charging duty would be their price at the factory gate and would not include the freight and insurance expenses from the factory gate to the customer's p....
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....d that this is not a case for waiver from the requirement of pre-deposit of duty demand, interest and penalty. 3. We have carefully considered the submissions from both sides and perused the records. In this case there is no dispute about the fact that the appellant are eligible for exemption under Notification No. 56/02-C.E. in respect of the items being manufactured by them. This exemption exempts the specified goods manufactured by units located in the specified areas in the State of Jammu and Kashmir from - "so much of the duty of excise or additional duty of excise, as the case may be, leviable thereon under any of the said acts, as is equivalent to the amount of duty paid by the manufacturer, other than the amount of duty pai....
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....004 and Rule 10 of the Cenvat Credit Rules, 2002 and according to this rule, notwithstanding anything contained in the Cenvat Credit Rules, 2002/2004, where a manufacturer has cleared any inputs or capital goods by availing duty exemption under Notification No. 56/02-C.E., the Cenvat credit on such input/capital goods shall be admissible as if no portion of the duty paid on such inputs or capital goods was exempted under the said notification. Thus, though in respect off the J&K units availing of duty exemption under Notification No. 56/02-C.E., duty exemption equal to the extent to which the duty was paid through PLA, has been availed, when these goods are purchased by another manufacturer for use as input, he would be eligible for full Ce....
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....r finding that the appellant's sales were at the factory gate, though in addition to the price of the goods they were charging freight and insurance as they were arranging the transport. But just because the appellant were arranging the transport of the goods and charging the transport and insurance expenses from the customers it cannot be said that the sale had taken place at the customer's premises. We are, therefore, of the prima facie view that the appellant have paid duty, which is in excess of what was correctly payable and as discussed above, they would not be eligible for its refund. We also find that at no point of time, that the appellant had specifically intimated to the Department that they are paying duty on price which include....