2012 (4) TMI 536 - AT - Central Excise

Tribunal waives pre-deposit for applicants due to lack of evidence. Market inquiry crucial.

The Tribunal ruled in favor of the applicants, waiving the pre-deposit of duty, interest, and penalty. The decision was based on the lack of evidence ... Waiver of pre-deposit of duty - Bar of limitation - Held that:- there is no evidence on record to show that the goods in question are capable of being bought and sold in the market. Even no market enquiry was conducted in reference to the goods in question. In these circumstances, the applicants have a strong case in their favour. Therefore, pre-deposit of the duty, interest and penalty is waived and recovery thereof stayed during the pendency of the appeal - Stay granted. Issues Involved:1. Waiver of pre-deposit of duty, interest, and penalty.2. Whether the goods in question amount to manufacture.3. Time-barred demand due to the issuance of Show Cause Notice.4. Marketability of the goods and evidence supporting the same.Analysis:Issue 1: Waiver of Pre-deposit of Duty, Interest, and PenaltyThe applicant sought a waiver of pre-deposit of duty amounting to Rs. 82,47,100, along with interest and penalty. The demand was related to the period from January 2005 to September 2009 for intermediate products used in the manufacture of X-ray intensifying screens, which were claimed to be exempt from duty payment. The contention was based on the process of importing X-ray phosphor and adding solvent and binders to manufacture the screens. Additionally, the top coat, a mixture of binder and solvent fine and glue, was also discussed. The adjudicating authority's decision was challenged, arguing that the process did not constitute manufacturing and lacked evidence of marketability. The Tribunal considered the lack of evidence supporting marketability and ruled in favor of the applicant, waiving the pre-deposit of duty, interest, and penalty during the appeal's pendency.Issue 2: Whether the Goods Amount to ManufactureThe Revenue contended that the activities undertaken by the applicants constituted manufacturing, emphasizing the goods' usability within a specific timeframe as evidence of marketability. However, the Tribunal noted the absence of concrete evidence or market inquiry supporting the goods' capability to be bought and sold. In the absence of such evidence, the Tribunal found in favor of the applicants, indicating a strong case in their favor and granting the waiver of pre-deposit and stay on recovery during the appeal process.Issue 3: Time-barred DemandThe applicants argued that the demand was time-barred due to the Show Cause Notice issued in 2010 for the period from 2005 to 2009, invoking the extended period of limitation based on suppression. They highlighted providing process details in 2005 and the utilization of credits post the disputed period to pay duty. The Tribunal did not specifically address the time-barred aspect in the summarized judgment but focused on the lack of evidence regarding marketability and the waiver of pre-deposit.Issue 4: Marketability of the GoodsBoth parties presented arguments regarding the marketability of the goods, with the Revenue asserting that the goods were capable of being bought and sold due to their shelf life. However, the Tribunal emphasized the absence of evidence or market inquiry establishing the goods' marketability. The lack of such evidence led to the Tribunal ruling in favor of the applicants and granting the waiver of pre-deposit, interest, and penalty during the appeal's pendency.In conclusion, the Tribunal ruled in favor of the applicants, waiving the pre-deposit of duty, interest, and penalty based on the lack of evidence supporting the marketability of the goods in question. The decision highlighted the importance of concrete evidence and market inquiry in establishing the capability of goods to be bought and sold, ultimately impacting the outcome of the case.