Pre-deposit in excise dispute: site-made bridge girders remained duty-liable, but penalty and redemption fine were stayed.

Prima facie, reinforced cement concrete girders manufactured at a bridge construction site were treated as excisable goods, so the duty demand was not subject to waiver of pre-deposit. The argument that Notification No. 51/95 merely clarified Notification No. 36/94 and operated retrospectively was not accepted at that stage, because the later notification appeared to introduce material changes to the earlier exemption. Manufacture pursuant to a bridge construction contract did not, by itself, negate duty liability. Penalty under Section 11AC was, however, found inapplicable prima facie because the goods were manufactured before that provision came into force, so pre-deposit of the penalty and redemption fine was waived and their recovery stayed on deposit of the duty demanded.

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Issues: Whether waiver of pre-deposit could be granted in respect of the duty demand, redemption fine and penalty arising from manufacture of reinforced cement concrete girders at the construction site.

Analysis: The demand was based on the view that the girders were excisable goods manufactured at site during the course of bridge construction. The plea that Notification No. 51/95 merely clarified Notification No. 36/94 and operated retrospectively was not accepted at the prima facie stage, as the later notification appeared to make material changes to the earlier exemption. The goods having been manufactured in pursuance of a contract for bridge construction did not, by itself, displace duty liability. However, the penalty under Section 11AC was found inapplicable prima facie because the goods were manufactured before that provision came into force.

Conclusion: Pre-deposit of duty was not waived. Pre-deposit of the penalty and redemption fine was waived, and their recovery was stayed on compliance with the direction to deposit the duty demanded within the stipulated time.

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