2002 (2) TMI 488 - AT - Central Excise

Summary

Issues:
Application for waiver of pre-deposit of Central Excise duty, penalty under Section 11AC of the Central Excise Act, and penalty under Rule 173Q of the Central Excise Rules.

Analysis:
The application was filed by M/s. Praja Mechanicals Ltd. seeking a waiver of pre-deposit of Central Excise duty, penalty under Section 11AC of the Central Excise Act, and penalty under Rule 173Q of the Central Excise Rules. The appellant, represented by Shri M. Chandrasekharan, argued that they manufacture conveyors and parts thereof, varying in size from 8 meters to 640 meters, making it impractical to transport as a single unit under a single invoice. They contended that duty payment was made based on whether the conveyors were supplied in parts or as a complete system, citing relevant legal precedents to support their classification under specific headings of the Central Excise Tariff Act. The appellant emphasized that they had not concealed any information and had provided all necessary documents to the Department, questioning the justification for invoking an extended period beyond six months.

On the other hand, the respondent, represented by Shri M.P. Singh, argued against the waiver, claiming that the conveyors did not come into existence from assembly at the appellant's factory, and there were additions of bought-out items. Referring to specific invoices, the respondent contended that the conveyors were not supplied as per the purchase order value, citing a legal precedent where the parts of a conveyor system were classified under a specific heading for assessment based on their presentation condition.

After considering the arguments from both sides, the Tribunal found that the appellant had presented a strong prima facie case on merit and time limit in their favor. Consequently, the recovery of the entire amount of duty and penalty was stayed during the pendency of the appeal, with the final hearing scheduled for a later date.

This judgment highlights the complexities involved in the classification of goods for duty assessment under the Central Excise Act, emphasizing the importance of legal precedents and factual evidence in determining the appropriate classification. The Tribunal's decision to stay the recovery pending the appeal demonstrates a balanced approach to addressing the issues raised by the appellant regarding duty payment and penalty imposition, ensuring a fair and thorough examination of the case before reaching a final decision.