Nirlon Ltd. Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:

.....of the commissioner of central excise who has confirmed a duty demand of rs. 92,10,343.89 against the applicants herein who are engaged in the manufacture of polyester filament yarn, nylon filament yarn and tyre cord fabrics on the ground that during the period 1.3.94 to 31.3.1998, the applicants failed to file price lists/price declaration on advalorem basis and further that the values based on which they paid duty on the said goods were not the proper values as per section 4 of the central excise act 1944. he has also imposed a penalty of amount equal to duty upon the applicants. the charge that the value on the basis of which duty was paid was not the correct value is based upon the non inclusion of the elements of brokerage and transit insurance in the value of clearances.2. on hearing shri m.h. patil ld. counsel and shri m.h. shaikh ld. dr and noting that the applicant company has been declared as a sick unit under the provisions of the sick industrial companies (special provisions) act, 1987, and noting the recent judgment of the hon'ble calcutta high court, in the case of allied resins & chemicals ltd. v.union of india [2001 (132) elt 557 (cal.)] wherein it has been.....

Judgment:

1. The above application for waiver of predeposit and stay of recovery arises out of the order of the Commissioner of Central Excise who has confirmed a duty demand of Rs. 92,10,343.89 against the applicants herein who are engaged in the manufacture of Polyester Filament Yarn, Nylon Filament Yarn and Tyre Cord Fabrics on the ground that during the period 1.3.94 to 31.3.1998, the applicants failed to file price lists/price declaration on advalorem basis and further that the values based on which they paid duty on the said goods were not the proper values as per Section 4 of the Central Excise Act 1944. He has also imposed a penalty of amount equal to duty upon the applicants. The charge that the value on the basis of which duty was paid was not the correct value is based upon the non inclusion of the elements of brokerage and transit insurance in the value of clearances.

2. On hearing Shri M.H. Patil Ld. Counsel and Shri M.H. Shaikh Ld. DR and noting that the applicant company has been declared as a Sick Unit under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1987, and noting the recent judgment of the Hon'ble Calcutta High Court, in the case of Allied Resins & Chemicals Ltd. v.Union of India [2001 (132) ELT 557 (Cal.)] wherein it has been held that recovery of Customs duty from a sick industrial undertaking, in respect of which a scheme envisaged under Section 17 of Sick Industrial Companies (Special Provisions) Act, 1955 is still under preparation, to be proceeded with only after obtaining leave from BIFR and also nothing that no purpose would be served if predeposits were directed, since the department is restrained from recovering the duty, we waive the predeposit of duty and penalty and stay the recovery thereof pending the appeal.