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2006 (7) TMI 440 - AT - Central Excise
Issues:
1. Whether the applicants are entitled to waiver of pre-deposit of duty and penalty based on Notification No. 6/2002-CE dated 1-3-02. Analysis: 1. The applicants filed an application seeking waiver of pre-deposit of duty amounting to Rs. 1,49,80,000/- along with an equal penalty. They are involved in the fabrication of bus bodies using duty-paid chassis for which they take credit. The demand was raised citing Notification No. 6/2002-CE, stating that they should only pay duty at 16% on the body value without taking credit for the chassis duty paid. The applicants argued that since they were availing credit for the chassis duty, they were not eligible for the notification's benefit. They contended that they paid duty after considering the chassis value as well. 2. The revenue contended that as per the notification's condition, the applicants should not pay duty on the body, and the Explanation to Rule 3 states that the notification's condition supersedes the Cenvat Credit rules. The demand was upheld based on this argument. 3. The Tribunal observed that Notification 6/2002 is conditional, and since the applicants were taking credit for the duty paid on the chassis, they did not meet the notification's condition. However, considering that the applicants were paying duty by including the chassis value, they were deemed to have a strong case. Consequently, the Tribunal waived the pre-deposit of the entire duty and penalty for the appeal hearing, allowing the stay petition. This judgment clarifies the interpretation and application of Notification No. 6/2002-CE in a case involving duty payment on bus bodies fabricated with duty-paid chassis. The Tribunal's decision to grant waiver for the pre-deposit was based on the applicants' practice of paying duty inclusive of the chassis value despite availing credit. The ruling highlights the importance of compliance with notification conditions and the interplay between such notifications and Cenvat Credit rules in determining liability for duty payment.
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