S B PACKAGINGS LIMITED Vs. CESTAT

JUDGEMENT

(1.) This appeal filed under Section 35G of the Central Excise Act, 1944 (for brevity, the Act') is directed against order dated 5-12-2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity, CESTAT') dismissing appeal of the assessee on the principal ground that the assessee was not able to demonstrate to the satisfaction of the CESTAT that it was not in sound financial position to deposit the amount of duty.

(2.) The assessee is engaged in manufacturing of excisable items listed in the First Schedule of the Central Excise Tariff Act, 1985. It was issued a show cause notice on 17-9-2002 and demands for a total amount of Rs. 43, 24,933/- was raised for the period May 2000-2001. The assessee filed its reply to the show cause notice. The Commissioner (Appeals) after hearing the parties recorded a finding that the assessee had recovered an amount of Rs. 43,24,933/- during May 2000-2001 by representing the same as duty of excise on clearance of exempted lay flat tubing but the same had not been paid to the Department and it was recoverable under Section 11D of the Act. It was held that an amount of Rs. 3,45,995/- alone has been paid which is to be adjusted in the aforementioned amount. A penalty amounting to Rs. 1,000/- was also imposed on the assessee. Aggrieved against the aforementioned order of the Commissioner (Appeals), the assessee approached the CESTAT. Along with the appeal an application by the assessee under Section 11D of the Act was filed with a prayer for waiving of pre- deposited amount of Rs. 43,24,933/- and a penalty of Rs. 1,000/-. The CESTAT came to the conclusion that the amount recoverable under Section 11D of the Act was not duty as per the stand of the assessee and the provisions of Section 35F of the Act did not apply. However, it stayed the penalty of Rs. 1,000/- [2004 (176) E.L.T. 335 (Tribunal)].

(3.) The assessee felt aggrieved and challenged order dated 1-3-2004 before this Court by filing Civil Writ Petition No. 8890 of 2004. A Division Bench of this Court set aside the order by holding that the assessee could not be nonsuited at the threshold merely on the basis of its stand that the recovery sought to be made was not duty. The operative part of the order reads as under :-