By TIOL News Service

MUMBAI, OCT 25, 2014: DUTY demands of Rs.43,03,398/- & Rs.3,52,631/- along with interest and penalty have been confirmed against the appellant by the lower authorities and, therefore, the appellant is before the CESTAT.

The first demand is on the ground that the applicant had availed credit of duty paid on the material without any documents.

It is the submission of the applicant that the SIM cards were manufactured and cleared by the applicant on payment of appropriate duty and later the defective SIM cards were received back in the factory; that at the time of receipt of the defective SIM cards the applicant took the credit and the SIM cards after due rectification were cleared on payment of appropriate duty.

In respect of the second demand of Rs.3,52,631/-, the submission is that some programmed SIM cards were cleared on payment of appropriate duty but which were received as defective and the applicant had not availed credit on the duty paid on such SIM cards and the same were cleared after rectification without payment of duty. Hence the demands are not sustainable.

The AR said that the demands are rightly made.

The Bench observed -

"7. In view of the fact that duty paid SIM cards which were found to be defective were received in the factory and credit was availed on the duty paid on such SIM cards and subsequently the same after rectification of the defects were cleared on payment of appropriate duty, the applicant had a strong case for waiver of pre-deposit of the dues. The pre-deposit of the dues is waived and recovery thereof stayed for hearing the appeal."

The Stay petition was allowed.

In passing: Open and Shut case …but even a Government of India undertaking has to go through all this…

(See 2014-TIOL-2084-CESTAT-MUM)