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1989 (11) TMI 191 - AT - Central Excise
Issues: Application for waiver of pre-deposit of duty and penalty under impugned order. Interpretation of Notification 191/85 regarding exemption to polyester fibre. Liability of duty on supplier or appellants. Correlation of clearance of fents, rags, and chindies with total clearance of low price fabrics. Failure of lower authority to consider appellants' plea.
In this judgment by the Appellate Tribunal CEGAT, MADRAS, the issue at hand was an application for waiver of pre-deposit of duty amounting to Rs.1,63,380 and a penalty of Rs.16,000 imposed on the appellants as per the order of the Collector of Central Excise, Bangalore. The learned Consultant for the appellants argued that the duty demand was related to clearances of fents, rags, and chindies exceeding 8% of the total quantity of low-price fabrics under Chapter 5501.20 of the Central Excise Tariff Act, 1985. The appellants were manufacturing fabrics using polyester yarn under a concessional rate of duty, as per Notification 191/85, to provide affordable fabrics to the masses. The consultant highlighted the conditions of the notification, emphasizing that the liability, if any, should be on the supplier as per the terms of the notification. The plea made by the appellants regarding jurisdictional issues and the lack of findings by the lower authority was also brought to attention. The Departmental Representative supported the Collector's reasoning, but the Tribunal observed that the appellants raised valid legal questions regarding the liability for duty and the period for correlating clearances of fents, rags, etc., with total clearances of low-price fabrics. The lower authority failed to address these pleas, leading to a lack of consideration of crucial aspects. Consequently, the Tribunal found that the appellants had a prima facie good case and waived the pre-deposit of duty and penalty until the appeal's disposal. The appellants requested an immediate decision on the appeal due to the lower authority's failure to appreciate their pleas, which the Departmental Representative did not oppose. Further analysis revealed that the lower authority did not adequately examine the matter and failed to consider all the appellants' arguments before issuing the impugned order. The Tribunal concluded that the lower authority's order was improper and set it aside, remanding the matter for fresh consideration, granting the appellants an opportunity to be heard. The decision highlighted the importance of determining the liability for duty, the necessity of considering all relevant pleas, and the statutory requirements outlined in Notification 191/85, emphasizing the need for a comprehensive review of the case by the lower authority. Ultimately, the appeal was allowed by remand, directing a thorough reevaluation of the issues at hand.
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