Customs, Excise and Gold Tribunal - Mumbai
Pooja Tex Prints Pvt. Ltd. And Mahendra ... vs Commissioner Of Customs And Central ... on 31 October, 2003
ORDER Jyoti Balasundaram, Member (J)
1. The applications for waiver of pre-deposit arise out of the order of the Commissioner of Central Excise, Surat, who has confirmed the total duty demand of Rs. 43,27,052/- on processed manmade fabrics failing under Chapter 54.06 of the Schedule to the CETA, 1985 cleared by the applicants herein who are 100% EOU and imposed penalty of equal amount and also imposed penalty of Rs. 5 lakhs on Shri Mahendra Harnath Rai Agarwal, Director of M/s. Pooja Tex Prints Pvt. Ltd. Out of the total duty demand, a sum of Rs. 7,04,533/- has been confirmed on 69362 L.Mtrs., of processed manmade fabrics found short at the time of stock taking by applying the full rate of customs duty as per proviso to Section 3 of the Central Excise Act, 1944. Duly demand of Rs. 36,26,396/- has been confirmed on clearances of processed manmade fabrics, rejects and wastes to the DTA by applying Notification 2/95.
2. We have heard both sides. The submission of the applicants that on the goods cleared clandestinely, i.e., without permission to DTA, it is Central Excise duty that is applicable in terms of Section 3(i) of the Central Excise Act, 1944 as per the apex Court judgment in the case of SIV Industries Ltd. v. CCE 2000 (117) ELT 281 (SC) and Board's circular No. 618/9/2000-CE dated 13/02/2000 and not the proviso to Section 3 of the Central Excise Act, is prima facie acceptable. The duty payable in terms of Section 3(i) of the Central Excise Act, is claimed to be Rs. 1,66,468/-, applying the rate of 16% as per Notification 17/2000-CE dated 01/03/2000; this is also prima facie acceptable.
3. The contention of the appellants that goods on which demand of over Rs. 36 lakhs has been confirmed were manufactured out of indigenous raw material procured from 100% EOU and therefore Notification 8/97-CE dated 01/03/1997 is applicable, as per which the rate of duty is 8%, thus resulting in duly liability of only Rs. 10,57,465/-(as against Rs. 36,22,519/-); is also prima facie acceptable in the light of the Tribunal's order in the case of Favourite Industries v. CCE, Surat-I 2003 (156) ELT 802 (the Commissioner has not recorded any finding on the claim of the applicants to the benefit of Notification 8/97 as he has prima facie erroneously proceeded on the basis that the applicants only claimed the benefit of Notification 2/95 in respect of goods cleared to DTA with the permission of the Development Commissioner). We also note that as against the duty demand of Rs. 12,23,933/- admitted by the applicants, they have already paid Rs. 12,83,266/-. We therefore waive the pre-deposit of duty and penalty and stay recovery thereof pending the appeals.