2004 (10) TMI 355 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of Central Excise duty and penalty.

Analysis:
The case involves an application by M/s. Bajrang Wire Products (India) Pvt. Ltd. seeking waiver of pre-deposit of Central Excise duty amounting to Rs. 2,85,71,358/- and a penalty of Rs. 4 lakhs. The appellant, represented by Shri L.P. Asthana, argued that they are engaged in drawing wire from wire rods, clear the wire on payment of duty, and avail Cenvat credit of duty paid on wire rods. A show cause notice was issued to them alleging that the process of drawing wire does not amount to manufacture, and the Cenvat credit wrongly taken is recoverable. The Commissioner directed them to deposit a significant amount. The appellant contended that the duty paid on wire should be treated as reversal of Cenvat credit if their process does not amount to manufacture, citing a Tribunal decision. They argued that Section 11D of the Central Excise Act, which requires payment of excess duty collected from buyers, is not applicable to them as they are not liable to pay duty under the Act due to the nature of their process.

The respondent, represented by Shri S.M. Tata, opposed the arguments by reiterating the findings in the impugned order. However, after considering both sides' submissions and the provisions of Section 11D of the Central Excise Act, the Tribunal, comprising Ms. Jyoti Balasundaram and Shri V.K. Agrawal, held that the applicants have made a strong prima facie case as they are not liable to pay Central Excise duty. Consequently, the Tribunal stayed the recovery of the entire duty and penalty during the appeal's pendency, which was scheduled for regular hearing on 30-12-2004.