2014 (2) TMI 356 - HC - Central Excise

Court allows waiver of pre-deposit, overturns duty amount requirement. Legal precedent and conflicting judgments considered.

ALUMAYER INDIA PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-V

ALUMAYER INDIA PVT. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-V - 2014 (299) E.L.T. 171 (Bom.) Issues Involved:1. Whether the Tribunal was right in holding that the Appellants did not make out a prima facie case for total waiver of pre-deposit.2. Applicability of the extended period of limitation under Section 11A(1) of the Central Excise Act, 1985.3. Classification of the goods under the appropriate tariff heading.4. Whether the Tribunal's reliance on the Bangalore Bench's decision was appropriate.Detailed Analysis:Issue 1: Prima Facie Case for Waiver of Pre-depositThe Tribunal directed the Appellants to deposit the entire duty amount of Rs. 28,12,634/- while waiving the penalty and interest. The Tribunal's decision was influenced by a prior judgment from the Bangalore Bench, which held similar goods as excisable. The Tribunal concluded that no prima facie case for waiver was made, particularly since the Appellants did not plead financial hardship.Issue 2: Extended Period of LimitationThe show cause notice issued on 23 March 2009 invoked the extended period of limitation under the proviso to Section 11A(1) on the grounds of suppression of facts by the Appellants. The Appellants argued that the law was unsettled before the Larger Bench decision in Mahindra and Mahindra Limited v. Commissioner of Central Excise, Aurangabad (2005), and therefore, there was no suppression. The Tribunal, however, relied on the Bangalore Bench's decision which applied the extended period of limitation, citing the Supreme Court's judgment in Commissioner of Central Excise v. Man Structurals Limited (2001).Issue 3: Classification of GoodsThe dispute centered on whether the fabricated curtain wall/structural glazing installed by the Appellants should be classified under Heading 76.10 of the Central Excise Tariff Act, 1985. The Tribunal's decision was influenced by the Bangalore Bench's ruling that the goods were excisable. The Appellants contended that their activities did not result in new, identifiable, and marketable goods, thus should not be classified under the said heading.Issue 4: Reliance on Bangalore Bench's DecisionThe Tribunal's decision to deny the waiver was heavily influenced by the Bangalore Bench's ruling. The Appellants argued that the Bangalore Bench misinterpreted the Supreme Court's decision in Man Structurals and that the law was only settled post the Larger Bench decision in Mahindra and Mahindra. The Court noted that the Bangalore Bench's reasoning was flawed as it overlooked the Supreme Court's directive to determine the facts of each case individually.Court's Evaluation:The Court emphasized that the evaluation at this stage was limited to whether a prima facie case for waiver of pre-deposit was made out. The Court noted that prior to the Larger Bench decision in Mahindra and Mahindra, the prevailing judgment in Aruna Industries was in favor of the Appellants. The Supreme Court had established that where a bona fide doubt existed due to conflicting decisions, the extended period of limitation could not be applied. The Court found that the Tribunal failed to consider this principle and the state of the law before the Larger Bench decision.Conclusion:The Court concluded that a prima facie case for the waiver of pre-deposit was indeed made out by the Appellants. The impugned order of the Tribunal was set aside, and the Appellants were directed to be heard without depositing the duty amount. The observations were confined to the application for waiver, and the substantive question of law was left open for the Tribunal's consideration during the appeal hearing. The appeal was disposed of with no order as to costs.