ORDER
Chittaranjan Satapathy, Member (T)
1. Heard both sides. The appellants have availed concessional rate of duty at the rate of 12% on readymade garments manufactured by them. The relevant Notification No. 15/2002-CE dated 1.3.02 requires that the exemption is subject to the condition that fabric used in the readymade garments (Sic) should be duty paid at the appropriate rate. The ld. Advocate, Shri S.K. Pahwa, appearing for the appellants states that the appellants used the silk fabric which was attracting nil rate of duty under Tariff. Hence, the appellants were under the impression that the condition is satisfied since the nil rate of duty was the appropriate rate of duty. However, he fairly states that the law has subsequently been laid down by the Hon’ble Supreme Court in the case of Collector of Central Excise, Vadodara v. Dhiren Chemical Industries , wherein it has been held that the payment of appropriate duty would imply the payment of some duty and not nil rate of duty. He (Sic) prays for waiver of predeposit on the following two grounds:
(i) The appellants were under the bonafide belief that the nil rate of duty on silk fabric is the appropriate duty paid as they were ignorant of the decision of the Hon’ble Supreme Court in Dhiren Chemical Industries (cited supra);
(ii) The appellants had disclosed in their registration application that the major raw materials used by them were silk fabrics and as such, there was no mis-statement, suppression etc. by the appellants, which attracts extended period of time.
2. We have heard the ld. SDR for the Revenue, who states that the decision of the Hon’ble Supreme Court is dated 12.12.01 and the impugned period is 1.3.02 to 31.3.03 and hence the ground of bonafide belief that the silk fabrics were appropriately duty paid, is not tenable. He further states that the appellants suppressed the facts from the Department that the impugned goods have been manufactured from non-duty paid silk fabric. He states that the appellants should be directed to predeposit the duty and penalty.
3. After hearing both sides and perusing the case records as well as the cited case laws, we are of the prima-facie view that (Sic) since the law was settled on 12.12.01, the appellants cannot take shelter under a bonafide belief that the silk fabrics were appropriately duty paid. As regards the second claim that the appellants had disclosed to the Department regarding exclusive use of non-duty paid silk fabric, a part from declaring major raw material in the registration form, the appellants have not filed any other evidences before the Tribunal such as, monthly return etc., to justify their stand. As such, we are of the view that while the issue can be finally (Sic) decided with reference to the documentary evidence to be submitted by the appellants at the final hearing stage, they should be put to some condition of (Sic) predeposit before the appeal can be heard.
4. The ld. Advocate for the appellants offers to predeposit about 25% of the duty amount but he asks for six weeks time to predeposit. Accepting the said offer made by the ld. Advocate for the appellants, we direct the appellants to predeposit 25% of the duty amount within six weeks from today and report compliance on 23rd January, 2008. Subject to compliance with the above direction, predeposit of the balance amount of duty and penalty shall remain waived during the pendency of the appeal.
Dictated and pronounced in the open Court.