2014 (2) TMI 588 - AT - Central Excise

Tribunal orders partial predeposit for duty waiver appeal

The Tribunal found that the Applicant failed to prove grounds for a full waiver of the duty, interest, and penalty imposed. The Tribunal ordered the ... Waiver of predeposit - trading activity or manufacturing activity - Liability to pay duty - digital Thermometer, indicator, digital scaler etc. - Held that:- it is not the case where the Applicant was merely purchasing various items and selling them as such; but they were processing the said goods further to make them fit to be marketable. The resultant products were classifiable under various chapter sub-headings of Central Excise Tariff Act, 1985. We find that the Applicant has itself treated the activities carried by them as a manufacturer and subsequently, taken the Central Excise Registration for manufacture of the excisable goods - Applicant were not merely doing the trading activities of the goods - Applicant has not been able to make out a case for full waiver of the dues adjudged - Conditional stay granted. Issues: Application for waiver of predeposit of duty, interest, and penalty imposed on the Applicant.Analysis:1. The Applicant sought waiver of predeposit of a substantial amount along with interest and penalty. The Applicant was engaged in procuring and selling electrical equipment to manufacturers of excisable goods. Initially registered as a dealer, they later obtained Central Excise Registration as a manufacturer. The Applicant argued that the activities conducted on the impugned items before sale did not amount to manufacture, hence they were not liable to pay duty for a specific period.2. The Revenue, represented by the ld. Adjudicating Commissioner, contended that the Applicant was indulging in manufacturing excisable goods without discharging central excise duty. The Commissioner's detailed order highlighted that the Applicant had taken Central Excise License as a manufacturer for a subsequent period. The investigation included statements from various individuals associated with the Applicant, confirming the manufacturing processes involved. The Commissioner found no difference in the processes carried out when the Applicant was registered as a dealer or as a manufacturer.3. The statements of key personnel, including the Production-in-Charge and Director of the assessee company, revealed the detailed processes involved in manufacturing the products. The Quality Control Department's confirmation of the production process further supported the Revenue's contention. The Commissioner concluded that the Applicant was not merely engaged in trading activities but was processing goods further to make them marketable, resulting in products classifiable under the Central Excise Tariff Act.4. The Tribunal, after considering the arguments from both sides, found that the Applicant failed to establish a case for full waiver of the dues adjudged. The Tribunal directed the Applicant to make a predeposit of 25% of the duty within a specified timeframe and submit a compliance report. Upon deposit, the balance dues adjudged would be waived, and recovery stayed during the pendency of the Appeal. Failure to comply with the deposit requirement would lead to the dismissal of the Appeal without further notice.This detailed analysis of the judgment highlights the key arguments presented by both parties, the findings of the Adjudicating Commissioner, and the final decision of the Tribunal regarding the waiver of predeposit and the liability of the Applicant for central excise duty.