2003 (12) TMI 468 - AT - Central Excise

Summary

Issues:
Stay applications against common impugned order passed by Commissioner of Customs and Central Excise, Visakhapatnam demanding duty and penalty.

Analysis:
1. Demand of Duty and Penalty: The impugned order demanded duty of Rs. 7,21,08,691/- on the appellants, M/s. ABB Ltd., and imposed a penalty under Section 11AC of the Central Excise Act, 1944. Additionally, a penalty of Rs. 2 lakhs was levied on M/s. GVK Industries under Rule 209A. The appellants sought waiver of pre-deposit and stay of recovery proceedings through the stay applications.

2. Contentions of Appellant: The appellants contended that the Heat Recovery Steam Generator (HRSG) imported by M/s. GVK Industries was classified as project imports under Heading 9801 of the Customs Tariff Act. They argued that the HRSG, being permanently fixed to the earth at the site, should be considered as immovable property not liable to Central Excise duty. Reference was made to legal precedents, including the Supreme Court decision in Triveni Engineering & Industries Ltd. v. CCE, to support the argument.

3. Revenue's Justification: The Revenue justified the demand and penalty imposed by the Department, emphasizing the findings in the impugned order. The Commissioner's findings highlighted that the HRSG, although bulky, could be dismantled and reassembled without losing its identity, indicating marketability. The Commissioner concluded that the HRSG constituted a distinct commodity, classifiable under Heading 8402 of the Central Excise Schedule, and was liable to duty.

4. Tribunal's Decision: The Tribunal acknowledged that determining whether the activity amounted to manufacture was a factual question requiring detailed examination during regular hearing. However, the Tribunal found merit in the appellant's argument regarding the claim of exemption under Notification No. 67/95. Citing a previous decision, the Tribunal held that prima facie, the appellants were entitled to the benefit of the notification. Consequently, the stay applications were allowed unconditionally based on the earlier decision and the entitlement to exemption under the notification.

In conclusion, the Tribunal granted the stay applications filed by the appellants against the impugned order, emphasizing the entitlement to exemption under Notification No. 67/95 based on legal precedents and the factual circumstances surrounding the classification and marketability of the imported HRSG.