2004 (97) ECC 149 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(A)

Shri V.K. Agrawal, Member (T) and Shri P.S. Bajaj, Member (J)

Arham Spinning Mills & Ors.

Versus

CCE, Jaipur

E/S/1916-18/2004-NB(A) in Appeal No. E/2930-32/2004-NB(A)

[Arising out of Order-in-Original No. 1/2004 dated 23.2.2004 passed by the Commissioner of Customs & Central Excise, Jaipur]

Stay Order No. 698 to 700/2004-NB(A), dt. 20.7.2004,
Certified on 5.8.2004

Waiver of Pre-deposit

Though the applicants have made out a strong prima facie case for not including freight and insurance, yet they have not made out a strong prima facie case for waiver of pre-deposit of entire amount of duty on account of misdeclaration of the goods cleared from the factory. The applicants are directed to deposit a sum of Rs. 10 lakh within six weeks from today and report compliance on 15.9.2004.

PRESENT :

Shri Balbir Singh, Adv. for the appellants.

Shri S.C. Pushkarna, JDR for the respondent.

Cases Cited :

1. Associated Strips Ltd. v. CCE, 2002 (81) ECC 404 (Tri).......................................................... [Para 2]

2. Escorts JCB Ltd. v. CCE, 2002 (84) ECC 225 (SC)................................................................... [Para 2]

Per : V.K. Agrawal

These are three applications by M/s. Arham Spinning Mills & Ors., for waiver of pre-deposit of Central Excise duty amounting to Rs. 64,60,952 and equal amount of penalty on the firm and penalty of Rs. 5 lakh each on Shri V.K. Kad, Vice President, and Shri D.S. Virdi, General Manager.

2. Shri Balbir Singh, learned Advocate, at the outset, mentioned that if at all the duty liability is held against them, it should not be more than Rs. 30 lakh and not Rs. 64,60,952 as confirmed by the Commissioner; that the duty amount to Rs. 17,07,337 has been confirmed on the ground that quantum of freight and insurance had not been added in the assessable value on the ground that the insurance of the goods was taken by the appellants; that this demand is not sustainable at all as the invoices were issued by the applicants from the factory in the name of respective consignees. He has placed reliance on the judgment in the case of Escorts JCB Ltd. v. CCE, 2002 (84) ECC 225 (SC) : 2002 (146) ELT 31 (SC) and in the case of Associated Strips Ltd. v. CCE, 2002 (81) ECC 404 (Tri) : 2002 (143) ELT 131 (Tri). He, further, submitted that the remaining duty has been confirmed on the ground that the description of the goods in invoices issued under Rule 52A from the factory for transfer of goods to their Ludhiana Depot, was different from the description of the goods mentioned in the invoices issued for the sale of the goods from Ludhiana Depot; that the Department has only found 33 invoices showing the difference in the description of the goods and on the basis of these 33 invoices, the duty has been demanded for the entire period which is not permissible. The learned Advocate, finally, mentioned that on the basis of 33 invoices, duty liability will be approximately Rs. 4.5 lakh.

3. Opposing the prayer, Shri H.C. Pushkarna, learned DR, reitered the findings as contained in the impugned Order and submitted that the insurance had been taken by the applicants which goes to show that the title in the goods has not been shifted to the customers; that the applicants were indulging in evasion of duty by adopting modus operandi of menting (sic) description of the goods attracting lower rate of duty in Rule 52A invoices while clearing the goods from the factory, though the goods were of different description attracting higher rate of duty.

4. We have considered the submissions of both the sides. While the applicants have made out a strong prima facie case for not including freight and insurance in view of the Supreme Court decision in the case of Escorts JCB Ltd., they have not made out a strong prima facie for waiver of pre-deposit of entire amount of duty on account of misdeclaration of the goods cleared from the factory. We, therefore, direct the applicants to deposit a sum of Rs. 10 lakh within six weeks from today. On complying with this direction, the pre-deposit of remaining amount of duty and entire amount of penalty is waived and the recovery of the same shall stand stayed during the pendency of the appeals. The matters will come up for reporting compliance on 15.9.2004.

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