2003 (9) TMI 424 - AT - Central Excise

Summary

Issues:
Applications for waiver of pre-deposit of Central Excise duty and penalty imposed on various entities for the fabrication and laying of pipes and fittings.

Analysis:
The judgment involves four applications seeking waiver of pre-deposit of Central Excise duty and penalty imposed on entities involved in the fabrication and laying of pipes and fittings. The first applicant was awarded a contract for fabricating pipes and fittings for utility purposes. The advocate for the first applicant argued that the fabricated pipes, once laid in trenches, are not goods for the purpose of levying Central Excise duty as they are not movable and cannot be brought into the market for sale or purchase. Reference was made to Circular No. 58/1/2002-CX, which states that pipes embedded in earth are not chargeable to Excise duty. The advocate also claimed exemption under Notification No. 67/95-C.E., stating that the fabricated pipes are capital goods used within the factory of production. However, the Commissioner did not consider the circular or the notification in the impugned order.

In opposition, the learned DR argued that the activity undertaken by the first applicant results in the manufacture of excisable goods, specifically pipes. It was contended that the pipes are movable and liable to excise duty as they come into existence before being laid in trenches. The Commissioner had given a specific finding that the activity resulted in the manufacture of excisable goods known as pipes in common trade parlance.

Upon considering the submissions of both sides, the Tribunal found that the benefit of Notification No. 67/95-C.E. would be available to the pipes if they are considered excisable goods. The Tribunal held that the applicants had made out a strong prima facie case in their favor. As a result, the recovery of duty and penalties on all the applicants was set aside during the pendency of the appeals, which were scheduled for regular hearing on 28th October 2003.