2009 (5) TMI 664 - AT - Central Excise

Summary

Issues:
Waiver of predeposit of duty of excise under Section 11A(2) with interest under Section 11AB and penalty under Rule 25 of the Central Excise Rules based on the applicability of Notification No. 43/2001-C.E. (N.T.) to 100% EOU clearances of Spray Dried Instant Coffee Power to a DTA unit for ultimate export.

Analysis:

1. Applicability of Notification No. 43/2001-C.E. (N.T.) to 100% EOU clearances:
The issue in question revolved around the demand for duty on the grounds that the benefit of Notification No. 43/2001 was not applicable to 100% EOU clearances of Spray Dried Instant Coffee Power to a DTA unit. The adjudicating authority confirmed the demand based on the requirement that the provisions of the Central Excise (Removal of Goods at Concessional Rate of Duty For Manufacture of Excisable Goods) Rules, 2001 must be fulfilled. However, the Tribunal noted that the benefit of the notification is available to 100% EOU as per established legal precedents. The Tribunal found that the allegation in the show-cause notice was contrary to settled legal positions and that the order had gone beyond the notice's scope in disentitling the assessees from the notification's benefits. The Tribunal emphasized that the 2001 Rules should be followed with effective changes, and cited legal decisions to support its view.

2. Prima facie case for unconditional waiver:
After considering the arguments and legal positions presented, the Tribunal concluded that the assessees had made out a strong prima facie case for unconditional waiver. As a result, the Tribunal decided to dispense with the predeposit of duty, interest, and penalty, and stayed the recovery pending the appeal. This decision was based on the view that the assessees were entitled to the benefits of the notification and that the demand for duty was not sustainable in light of the legal interpretations provided.

In conclusion, the judgment by the Appellate Tribunal CESTAT, CHENNAI, delivered by Ms. Jyoti Balasundaram and Shri P. Karthikeyan, focused on the applicability of Notification No. 43/2001-C.E. (N.T.) to 100% EOU clearances of Spray Dried Instant Coffee Power to a DTA unit. The Tribunal found that the assessees had a strong prima facie case for unconditional waiver of predeposit of duty, interest, and penalty, as they were entitled to the benefits of the notification based on established legal precedents and interpretations.