2006 (6) TMI 381 - AT - Central Excise

Tribunal Grants Waiver on Pre-Deposit, Stays Recovery Pending Hearings

The Tribunal found that the appellants may have a good case on limitation, indicating that the demands could be prima facie barred by limitation due to ... Stay/Dispensation of pre-deposit - Demand - Limitation - Value of clearances Issues:Whether the appellants are two separate units or one combined unit, and if individual clearances could be denied along with determining duties and penalty.Analysis:The main issue in this case is whether the appellants are considered two separate units or one combined unit, and if the individual clearances could be denied while determining duties and penalties. The appellants argued that the duties as determined may not be applicable based on the definitions of manufacture and provisions of notifications. The Tribunal found that the core decision on this issue needs to be determined at the regular hearing. However, at a prima facie stage, the Tribunal noted that the appellants have a good case on limitation. The Tribunal observed that the demands may be barred by limitation as the activities were within the knowledge of the department, and the authorities did not take timely action. Citing relevant case laws, the Tribunal concluded that the demands could be prima facie barred by limitation.Regarding the limitation issue, the Tribunal further discussed the decision of the Larger Bench in Nizam Sugar Factory case and the subsequent Supreme Court ruling, which overruled the earlier decision. This analysis led the Tribunal to believe that the demands in this case could be barred by limitation. Consequently, the Tribunal ordered the full waiver of pre-deposit requirements under Section 35F of the Central Excise Act, 1944 for all the appellants, and stayed the recovery pending the regular hearing of the appeals.Both parties were given the liberty to file early hearing applications. The Tribunal's decision highlighted the importance of the limitation aspect in this case and the implications of the Nizam Sugar Factory case on the issue of demands being barred by limitation. The Tribunal's order for the waiver of pre-deposit and stay of recovery reflects the consideration given to the limitation issue and its impact on the proceedings.