Tribunal waives pre-deposit for capital goods used in manufacturing excisable goods

The Tribunal granted the waiver of pre-deposit based on the application of Notification no. 67/95-CE to the capital goods used in the manufacture of excisable goods, despite the Revenue's arguments regarding the dutiability of the Nitrogen/Oxygen plants. Recovery was stayed during the appeal's pendency, and the case was directed for regular hearing on a specified date.

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Issues:
1. Waiver of pre-deposit of duty, interest, and penalty.
2. Classification of Nitrogen/Oxygen Plants as excisable goods.
3. Applicability of Notification no. 67/95-CE to capital goods used in the manufacture of excisable goods.

Analysis:
Issue 1: The applicant sought waiver of pre-deposit of duty, interest, and penalty amounting to Rs.1,96,36,714. The contention of the applicant was that the Nitrogen/Oxygen plants, once assembled at the customer's site, became immovable property and thus not excisable goods. They also argued that the capital goods used in manufacturing the plants were exempted under Notification no. 67/95-CE.

Issue 2: The Revenue argued that the assembly of the Nitrogen/Oxygen plants constituted manufacture, making them dutiable products. They relied on precedents such as the decision in the case of Mahindra & Mahindra Ltd. vs. CCE, Aurangabad, and the Supreme Court rulings in the cases of Narne Tulaman Manufacturers Pvt. Ltd. vs. Collector of C.E and Solid & Correct Engineering Works. The Revenue contended that the plants were not immovable property and were subject to duty.

Issue 3: The Tribunal noted that the Nitrogen/Oxygen plants were assembled at the customer's factory, not the manufacturer's premises. However, the Tribunal found that the exemption under Notification no. 67/95-CE applied to capital goods manufactured in the factory of production and used in the manufacture of excisable goods. As the plants were fabricated in the customer's factory and used in manufacturing excisable goods, the Tribunal held that the appellant had a strong case for exemption. Consequently, the pre-deposit of dues was waived, and recovery stayed during the appeal's pendency.

In conclusion, the Tribunal granted the waiver of pre-deposit based on the application of Notification no. 67/95-CE to the capital goods used in the manufacture of excisable goods, despite the Revenue's arguments regarding the dutiability of the Nitrogen/Oxygen plants. The case was directed for regular hearing on a specified date.

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