Custom, Excise & Service Tax Tribunal
M/S. Rayalseema Steel Re-Rolling Mills ... vs Commissioner Of Central Excise & ... on 15 May, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BANGALORE SOUTH ZONAL BENCH COURT - I Stay & Appeal No: E/Stay/1537/2011 in E/2497/2011 (Arising out of Order-in-Appeal No: 48/2011 (H-III) CE. Dated 14.5.2011 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Hyderabad.) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether their Lordship wish to see the fair copy of the Order? Seen 4. Whether Order is to be circulated to the Departmental authorities? Yes M/s. Rayalseema Steel Re-Rolling Mills (P) Ltd. Appellant Versus Commissioner of Central Excise & Service Tax Hyderabad-III Commissionerate Hyderabad. Respondent
Appearance Shri R. Muralidhar, Advocate for the appellant.
Shri M. M. Ravi Rajendran, Additional Commissioner (AR) for the Revenue.
CORAM SHRI P. G. CHACKO, HONBLE MEMBER (JUDICIAL) SHRI M. VEERAIYAN, HONBLE MEMBER (TECHNICAL) Date of Hearing: 15.05.2012 Date of decision: 15.05.2012 FINAL ORDER No._______________________2012 [Order per: P.G. Chacko]. This application filed by the appellant seeks waiver of pre-deposit and stay of recovery in respect of duty of Rs.17,46,564/- and equal amount of penalty. On a perusal of the records and hearing both sides, we have found this case fit for remand subject to terms. Accordingly, after dispensing with pre-deposit, we take up the appeal.
2. This appeal is against the appellate Commissioners order dismissing the assessees appeal (filed against an adverse order of the original authority) on the sole ground of non-compliance with Section 35F of the Central Excise Act. Against the order-in-original which demanded the aforesaid amount of duty and imposed equal amount of penalty, the assessee preferred an appeal to the Commissioner (Appeals) and also filed therein an application for waiver of pre-deposit. The appellate authority disposed of that application directing the appellant to pre-deposit 50% of the duty amount. But no deposit was made by the appellant within the prescribed time. Having found no evidence of deposit, the appellate authority dismissed the appeal in the aforesaid manner. Hence the present appeal of the assessee.
3. It appears from the records that the appellant was undertaking a job work for one M/s. Ravi Organics Ltd. (ROL), who had obtained registration from the department for manufacture of structural items and had also given an undertaking to the Deputy/Assistant Commissioner of Central Excise having jurisdiction over the appellants factory, in terms of Notification No.214/86-CE dated 25.3.1986. Apparently, on the strength of such undertaking, the appellant manufactured structural items out of raw materials supplied by ROL and cleared the finished goods to ROL under job work challans. Subsequently, however, ROL submitted a letter dated 25.4.2009 to the Assistant Commissioner of Central Excise at the appellants end stating that they did not have any manufacturing facility, power connection, etc., and that whatever job-worked goods were received by them were mostly cleared to SEZ units. In the wake of this development, the department issued show-cause notice to the appellant for recovery of duty on the finished goods supplied to ROL during the period from 27.12.2008 to 10.4.2009. That notice also proposed penalty on the appellant. The demand of duty was contested by the noticee on the ground that they had undertaken job work in accordance with law and were entitled to clear the job-worked goods without payment of duty by virtue of Notification No.214/86-CE. It was in adjudication of this dispute that the original authority confirmed the demand of duty against the appellant and imposed on them equal amount of penalty. As already noted by us, the appeal filed by the party against the order-in-original came to be rejected by the Commissioner (Appeals) for non-compliance with Section 35F ibid.
4. After hearing both sides and considering their submissions, we have not found a prima facie case for the appellant strong enough to warrant full waiver of pre-deposit. The lower appellate authority asked for pre-deposit of 50% of the duty amount. According to the appellant, they are entitled to waiver of pre-deposit of the entire amount. This is based on the premise that, during the period of dispute, their activities were strictly in accordance with the aforesaid Notification. However the fact remains that ROL did not have manufacturing facility and could not have given any undertaking to the department in terms of the above Notification. It is also a fact, today, that ROL has no registration with the department. The learned counsel has relied on certain decisions of this Tribunal to get over these factual complications but we are not convinced, after a perusal of the cited decisions [2006 (206) E.L.T. 1043 and 2008 (224) E.L.T. 247]. As on today, we are not in a position to hold that the appellant was entitled to clear the goods to ROL without payment of duty. Further, we have taken note of one submission made by the learned counsel which is to the effect that the department has initiated proceedings against ROL. In the totality of the facts and circumstances of the case, in our view, a pre-deposit of 25% of the duty amount would suffice the purpose of Section 35F of the Central Excise Act before the learned Commissioner. Accordingly, we direct the appellant to pre-deposit 25% of the duty amount within six weeks from today and report compliance to the Commissioner (Appeals) whereupon the learned Commissioner shall take up the assessees appeal and dispose of it on merits without insisting on further deposit, of course, after giving them a reasonable opportunity of being heard.
5. The impugned order is set aside and this appeal is allowed by way of remand on the above terms. The stay application also stands disposed of.
(Pronounced and dictated in open Court) (M. VEERAIYAN) Member (T) (P. G. CHACKO) Member (J) rv ??
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