Schneider Electric India Pvt. Ltd. vs Commissioner of C. Ex.

Whether the CESTAT was justified in directing the appellant to deposit the entire duty demand confirmed by the Adjudicating Authority, is the question raised in this appeal? The appeal is admitted on the above question and taken up for final hearing by consent of both the parties. The appellant-assessee is engaged in the manufacture of switchgear products.

The dispute in the present case relates to the clearances effected during the period from December, 2007 to May, 2008. It is the case of the Revenue that the goods manufactured by the assessee were governed by the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 (''the 1977 Rules'' for short) and, therefore, the assessee was obliged to affix maximum retail price (MRP) on the goods manufactured and cleared by the assessee. Since the assessee had cleared the goods without affixing the MRP as per the 1977 Rules during the relevant period, proceedings were initiated and by an adjudicating order dated 26-5-2009, the duty demand of Rs. 1,01,48,606/- was confirmed. Challenging the aforesaid order, the assessee filed an appeal before the CESTAT. By the impugned order dated 18-2-2011 the CESTAT while holding that the issue was a debatable one, directed the assessee to deposit the entire amount of duty confirmed by the Adjudicating Authority. Challenging the said order, the present appeal is filed.

It is not in dispute that during the relevant period there was a decision of this Court in the case of Subhash Arjandas Kataria v. State of Maharashtra & Ors. reported in 2010 (4) AIR Bom. R. 570 wherein it was held that the 1977 Rules are not applicable in similar cases. Subsequently, this Court in the case of Larsen and Toubro Limited Vs. Union of India, following the decision of the Apex Court in the case of Whirlpool of India Ltd. Vs. Union of India (UOI) and Others, held that the judgment of this Court in the case of Subhash Arjandas Kataria is no longer a good law. It is to be noted that challenging the decision of this Court in case of Subhash Arjandas Kataria, the State had filed an appeal and the Apex Court by its judgment reported in State of Maharashtra and Others Vs. Subhash Arjundas Kataria, has doubted the correctness of its judgment in the case of Whirlpool India Ltd. (supra) and has requested that the matter be decided by a Larger Bench.

In these circumstances, when the issue as to whether the 1977 Rules are applicable to the case of the appellant itself is in doubt and during the relevant period, the judgment of this Court in the case of Subhash Kataria (supra) was holding the field, in our opinion, this is a fit case for granting waiver of pre-deposit. Accordingly, we quash and set aside the impugned order of the CESTAT and direct the CESTAT to dispose of the appeal filed by the assessee on merits and in accordance with law, without insisting pre-deposit of the duty demand confirmed by the Adjudicating Authority. The appeal is disposed off accordingly with no order as to costs.