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2002 (1) TMI 581 - AT - Central Excise
Issues involved:
1. Waiver of pre-deposit of Central Excise duty and penalties for four applicants. Analysis: Issue 1: Waiver of pre-deposit of Central Excise duty and penalties The applicants sought waiver of pre-deposit of Central Excise duty and penalties imposed on them. The first applicant, M/s. Indl. Gases Ltd., argued that they were not the manufacturers of the goods in question but had leased out their plant to Hindustan Zinc Ltd. (HZL) and were merely collecting rental charges. The advocate for the applicant cited relevant case laws to support their claim for waiver based on a strong prima facie case. They also contended that the demand was time-barred as the department was well aware of the facts from the beginning. The financial hardship faced by the applicant was highlighted, stating that the unit had been closed for a year and had incurred significant losses in the previous financial year. In opposition, the respondent argued that the examination of contracts and work orders indicated that the first applicant was indeed the manufacturer of the goods. Various clauses in the contracts pointed towards the applicant's ownership and operational control of the plant, indicating their liability to pay central excise duty. The respondent also challenged the claim of financial hardship by presenting the sales and income figures of the applicant from the year 2001. Upon considering the submissions, the tribunal acknowledged the arguable nature of whether the plant was leased or if the applicants were the manufacturers. However, they noted that the department was made aware of the facts through correspondence in 1995, indicating a strong prima facie case in favor of the applicants regarding the time limit issue. The tribunal directed M/s. Indl. Gases Ltd. to deposit Rs. 20 lakhs towards duty within 8 weeks, with a waiver of pre-deposit for the remaining duty and penalties. The recovery of the waived amounts was stayed during the pendency of the appeals, with a compliance reporting date set for a future hearing.
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