Tribunal directs deposit for waiver of Central Excise duty and penalty

The Appellate Tribunal CESTAT, New Delhi, directed M/s. Prachi Industries to deposit Rs. 15 lakhs within 8 weeks for waiver of the remaining Central Excise duty and penalty amounting to approximately Rs. 68 lakhs each. The Tribunal found that the process undertaken by the applicant resulted in a new commercial product, contrary to their argument that it did not amount to manufacture. The recovery of the deposited amount was stayed pending appeal, with a compliance reporting deadline set for 9-12-2003.

---

---

Issues: Application for waiver of pre-deposit of Central Excise duty and penalty.

In the judgment by the Appellate Tribunal CESTAT, New Delhi, the application filed by M/s. Prachi Industries for waiver of pre-deposit of Central Excise duty amounting to approximately Rs. 68 lakhs and an equal amount of penalty was considered. The applicant argued that the process of swaging mild steel tubes does not amount to manufacture, citing precedents and Supreme Court decisions. However, the Department contended that the impugned order was based on a Tribunal decision and no stay order from the Supreme Court was presented by the applicant. The Tribunal noted that in the applicant's own case, it was held that the process undertaken by them resulted in a new commercial product. The Tribunal directed the applicant to deposit Rs. 15 lakhs within 8 weeks, with a waiver of the remaining duty and penalty upon compliance. The recovery of the deposited amount was stayed pending the appeal, with a compliance reporting scheduled for 9-12-2003.

---