Tribunal grants full waiver of Central Excise duty, penalty pending appeal on pre-fabricated buildings.

The Tribunal granted M/s. A.V. Pandhe a complete waiver of pre-deposit and stay of recovery of Central Excise duty and penalty amounting to Rs. 3,58,61,693/- pending the decision in the appeal. The Tribunal determined that the goods in question were pre-fabricated buildings in CKD/SKD condition, eligible for exemption under Notification No. 3/05-C.E., and that the appellants were entitled to Cenvat credit for duty paid on inputs, significantly reducing their liability.

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Issues Involved:
1. Waiver of pre-deposit and stay of recovery of Central Excise duty and penalty.
2. Determination of whether the appellants manufactured excisable goods.
3. Classification of goods under appropriate Chapter Heading.
4. Eligibility for exemption under Notification No. 3/05-C.E.
5. Marketability and excisability of the goods.
6. Availability of Cenvat credit.

Issue-wise Detailed Analysis:

1. Waiver of Pre-deposit and Stay of Recovery:
M/s. A.V. Pandhe sought waiver of pre-deposit and stay of recovery of Central Excise duty amounting to Rs. 3,58,61,693/- and an equal amount of penalty imposed under Section 11AC of the Central Excise Act. The Tribunal granted complete waiver of pre-deposit and stay of recovery pending the decision in the appeal.

2. Determination of Whether the Appellants Manufactured Excisable Goods:
The appellants were found to have engaged in the manufacture of steel structurals such as columns, rafters, purlins, sub-beams, floor-beams, sub-columns, and staircases without following central excise formalities, including payment of duty. The Commissioner concluded that the appellants manufactured excisable goods falling under CSH 73089010 at Visakhapatnam and removed them for captive consumption in the construction of residential units on the Andaman & Nicobar Islands. The Tribunal, however, found that the goods were pre-fabricated buildings in CKD/SKD condition and not steel structurals of CSH 73089010.

3. Classification of Goods Under Appropriate Chapter Heading:
The appellants argued that the goods should be classified under Chapter Heading 9406 as pre-fabricated buildings, not under Chapter Heading 7308. The Tribunal referred to case laws, including National Steel Industries v. CCE, Mittal Pipe Manufacturing Co. v. CCE, and Controls & Schematics Ltd. v. CCE, which supported the classification of such goods as pre-fabricated buildings under Chapter Heading 9406. The Tribunal found that the goods were indeed pre-fabricated buildings in CKD/SKD condition.

4. Eligibility for Exemption Under Notification No. 3/05-C.E.:
The appellants contended that the goods were exempt from duty under Notification No. 3/05-C.E., which provided for nil duty on goods fabricated at the site of work for use in construction work at such site. The Tribunal noted that as per CBEC Circular No. 456/22/99, the term 'site' included premises made available for manufacturing goods by way of specific mention in the contract/agreement. The Tribunal found that the goods fabricated at the appellants' manufacturing facility, used solely in the construction work, were covered by the exemption under Notification No. 3/05-C.E.

5. Marketability and Excisability of the Goods:
The appellants argued that the goods were not marketable as they were not ordinarily brought to the market for being bought and sold. The Tribunal agreed, stating that the materials suitable only for the shelters constructed as per the contract could not be held to be goods that generally come to the market. Therefore, they were not marketable and not exigible.

6. Availability of Cenvat Credit:
The Commissioner had ordered that the appellants were eligible for credit of duty paid on inputs provided they had suitable duty-paying documents. The Tribunal noted that the appellants had submitted details of duty paid on steel materials procured from various sources, including M/s. SAIL and M/s. Abhishek Steel Ltd., which accounted for a significant amount of excise duty. The Tribunal found that the major part of the liability would be offset by the Cenvat credit admissible to the appellants.

Conclusion:
The Tribunal concluded that the appellants had no intention to evade duty and that the goods in question were pre-fabricated buildings in CKD/SKD condition, eligible for exemption under Notification No. 3/05-C.E. The Tribunal ordered a complete waiver of pre-deposit and stay of recovery pending the decision in the appeal.

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