1999 (1) TMI 382 - AT - Central Excise

Summary

Issues: Alleged manufacture of computer systems, applicability of law laid down by the Hon'ble Supreme Court, consideration of evidences, non-speaking order, need for re-evaluation of evidence in light of the Hon'ble Apex Court's decision.

The judgment by the Appellate Tribunal CEGAT, Chennai involved stay applications against an Order-in-Original confirming a duty demand and imposing penalties on the appellants for alleged manufacture of computer systems. The Department contended that the appellants assembled sub-assemblies into computer systems, while the appellants argued they engaged in trading activities by purchasing complete computer systems and adding peripherals. The appellants relied on evidence of purchasing complete computer systems from manufacturers and selling them to customers. The Tribunal noted that the Hon'ble Supreme Court's decision in the case of O.R.G. Systems was not considered during the original order, which defined a complete computer system as having specific components. The Tribunal highlighted that the Order-in-Original lacked detailed analysis of the evidence presented and failed to discuss how the appellants' activities amounted to manufacturing. It emphasized the need for re-evaluation of evidence in light of the O.R.G. Systems judgment.

The Tribunal found the stay order to be non-speaking as it did not provide a detailed examination of the invoices submitted by the appellants or discuss how the appellants' activities constituted manufacturing. It pointed out that merely supplying complete computer systems was insufficient to establish manufacturing without a thorough analysis of the evidence. The Tribunal emphasized the importance of considering the minimum basic configuration of a computer system as outlined in the O.R.G. Systems judgment, which was not available to the original adjudicating authority. Consequently, the Tribunal concluded that a re-evaluation of the evidence was necessary and set aside the Order-in-Original, remanding the case for de novo consideration by the Original Adjudicating authority. The Tribunal directed the authority to reassess all evidence submitted by the appellants and consider the O.R.G. Systems judgment in determining whether the activities amounted to manufacturing or trading. Ultimately, the appeals were allowed by way of remand, and the stay applications were disposed of accordingly.