1992 (8) TMI 203 - AT - Central Excise

Tribunal grants stay, waives pre-deposit, and recovery of duty & penalties. Appellants win in disputed fabrication case.

The Tribunal granted the appellants' stay petitions unconditionally, waiving the pre-deposit and stay of recovery of duty and penalties amounting to ... Stay/Dispensation of pre-deposit Issues:1. Waiver of pre-deposit and stay of recovery of demanded duty and penalties.2. Time-barred show cause notice for demanded duty.3. Dispute regarding fabrication and erection activities constituting manufacturing activity.4. Prima facie case for granting stay petitions.Detailed Analysis:1. The advocate for the appellants requested the waiver of pre-deposit and stay of recovery of duty and penalties amounting to Rs.19,69,854.00. The duty demanded was for the period June 1987 to 19-3-1990. The advocate argued that fabrication and erection work occurred at the same site, relying on previous judgments to support their case. The appellants contended that the adjudicating authority's findings were based on evidence beyond the scope of the show cause notice. The advocate also argued that the show cause notice for the period June 1987 to 15-5-1989 was time-barred as the department was aware of the activities since December 1988.2. The JDR for the respondents countered the appellants' arguments by stating that the show cause notice alleged fabrication of steel structures at a different site before erection, contradicting the appellants' claim of on-site fabrication. The JDR argued that the findings were within the notice's scope and that the delay in raising the demand was due to incomplete data provided by the appellants. The JDR contended that the appellants did not have a prima facie case and urged the dismissal of the stay petitions.3. The appellants, in response, refuted the JDR's claims by citing the show cause notice's admission of a separate case for the period June 1987 to 15-5-1989. They emphasized the payment system based on raw material utilization as evidence of on-site fabrication and erection activities. The appellants maintained that the construction and fabrication occurred concurrently at the site.4. The Tribunal, after considering the arguments from both sides, found the question of whether fabrication constituted manufacturing activity and if erection occurred on-site to be highly disputable and complex. Given the financial stakes and complexity of the issue, the Tribunal decided in favor of the appellants, granting the stay petitions unconditionally. The Tribunal directed an expedited hearing due to the importance of the matter, scheduling it for 27-11-1992.