Customs, Excise and Gold Tribunal - Mumbai
Kokan Synthetics And Chemicals Pvt. ... vs The Commissioner Of Central Excise on 10 June, 2004
ORDER K.D. Mankar, Member (T)
1. This stay application seeks waiver of pre-deposit of duty amount of Rs. 62,26,822/- and penalty of Rs. 10,00,000/-, which the applicants are required to deposit in terms of the order passed by the Commissioner, Central Excise.
2. The applicants are 100% EOU and they are engaged in the manufacture and export of Sulphanilic Acid Technical (S.A.T). Surphanilic Acid and Aniline are the two ingredients used in the manufacture. The applicants had imported part quantity of Aniline and partly procured it from the domestic supplier. In respect of clearances to the DTA, they sought the benefit of Notification No. 8/97-CE dated 01/03/97. The duty concession is applicable only if the goods are manufactured "wholly" from the indigenous raw materials. In terms of the investigation carried out by the department, it was revealed that, the manufacturer did not maintain proper records and therefore it was not possible to hold that the goods cleared to the DTA were made wholly from indigenous raw materials.
3. Heard both sides.
4. The applicants have vehemently argued that they have maintained batch wise records of production and the imported and indigenous Aniline was stored in separate tanks. In short, it was their case that they are eligible for exemption as the product is wholly made out of indigenous raw materials. The department disputes this by saying that, in respect of certain quantities of Aniline, shown to have been received in the factory, there is an admission that the said stock was not received at all. The appellants argued against the case made by the department, by placing before us several worksheets to claim that, there was no mix up of the indigenous and imported Aniline.
5. On carefully considering the rival arguments, we are of the opinion that, for the purpose of provisions of Section 35F, we are required to determine as to whether or not the appellants had made a strong prima facie case on merit for full waiver of pre-deposit of the amounts in question. We note that, the evidence brought on records and counter submissions from the applicants, require a detailed examination. Hence, we feel that there is no strong prima facie case on merits to waive the entire amount of duty and penalty. The Ld. Counsel for the appellants also pleads financial hardship.
6. Considering the facts and circumstances of the case, we direct the appellants to make a pre-deposit of Rs. 5 lakhs towards duty within eight weeks from today. On such deposit, the balance amount of pre-deposit of duty and penalty shall stand waived and the recovery stayed, till the dismissal of the appeal.
7. Post for compliance on 10/08/2004.
(Dictated in Court)