Tribunal grants waiver for duty & penalty on fabricated items dispute under CETA

The Tribunal granted the appellant's application for waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944. The dispute centered on the classification of fabricated items supplied to mega power projects under Chapter headings 73.08 and 98.01 of CETA, 1985 for exemption eligibility. Despite the Revenue's opposition, the Tribunal, considering a similar case precedent, found the appellant established a prima facie case for waiver. Consequently, the pre-deposit of dues was waived, and recovery stayed pending the appeal.

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Issues:
Waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944 for fabricated items supplied to mega power projects.

Analysis:
The appellant sought waiver of pre-deposit of duty amounting to Rs.1.45 crores and an equal penalty imposed under Section 11AC of CEA, 1944. The appellant, engaged in manufacturing fabricated items under Chapter 73.08 of CETA, 1985 supplied to mega power projects, claimed exemption under Notification No. 6/2006-CE. The dispute arose as the fabricated items were classified under Chapter Sub-Heading 73.08 of CETA, 1985 instead of Chapter Sub-Heading 98.01, affecting eligibility for the exemption. The appellant argued that the items were used as components in the power projects, citing a CBEC circular and a Tribunal order in a similar case for TMT bars. The Revenue supported the Commissioner's findings.

Upon review, the Tribunal acknowledged that the fabricated items were supplied to and used in mega power projects. The crux of the dispute was the classification under Chapter headings 73.08 and 98.01 of CETA, 1985, impacting eligibility for the exemption. Referring to a previous case involving TMT bars, the Tribunal found that even if falling under Chapter Heading 72, the items could still be eligible for the exemption under Notification No. 6/2006-CE. Consequently, the Tribunal held that the appellant had established a prima facie case for waiver of pre-deposit of dues. As a result, the pre-deposit of dues was waived, and recovery stayed pending the appeal.

In conclusion, the Tribunal granted the appellant's application for waiver of pre-deposit of duty and penalty under Section 11AC of CEA, 1944, based on the prima facie case presented regarding the classification of the fabricated items supplied to mega power projects.

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