UNIWORTH TEXTILES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This is an application by M/s. Uniworth Textiles Ltd. for waiver of pre -deposit of Central Excise duty Rs. 6,88417/ - and penalty of Rs. 50,000/ -.

(2.) Shri Rupesh Kumar, learned Advocate, submitted that the Applicants, a 100% Export Oriented Undertaking, had exported the goods to Nepal availing the benefit of concessional rate of duty under Notification No. 97/91 -C.E., dated 7 -10 -91; that the benefit of Notification has been disallowed to them on the ground that the concessional rate under the notification is available only if the goods are allowed to be sold in India and since the goods have not been allowed to be sold in India the benefit of this notification will not be available. The learned Advocate contended that if the goods have not been allowed to be sold in India, then the Central Excise duty cannot be demanded in terms of proviso to Sub -section (1) of Section 3 of the Central Excise Act and the duty is payable only under Section 3(1) of the Central Excise Act which at the relevant time was nil. On the other hand Shri H.C. Verma, learned D.R. reiterated the findings as contained in the impugned order.

(3.) We have considered the submissions of both the sides. The benefit of Notification No. 97/91 has been denied on the ground that the goods have not been allowed to be sold in India. In view of this the Revenue cannot apply the provisions of Proviso to Section 3(1) of the Act as these are also attracted when a 100% E.O.U. is allowed to sell the goods in the Domestic Tariff Area. Accordingly the Applicants have made out strong prima facie case for waiver of pre -deposit of entire amount of duty and penalty. We, therefore, stay the recovery of the entire amount of duty and penalty during the pendency of the appeal which is posted for regular hearing on 1st February, 2005.