2005 (9) TMI 354 - AT - Central Excise

Stay/Dispensation of pre-deposit - EXIM - Export Oriented Unit - Appeal to Appellate Tribunal

Summary

Issues:
1. Delay in appeal condonation.
2. Use of duty-free imported machinery in a 100% EOU for domestic production.
3. Duty calculation on impugned goods.
4. Role and effectiveness of departmental representatives in Tribunal cases.
5. Interpretation of the provisions of the Central Excise Act regarding 100% EOUs.

Delay in Appeal Condonation:
The judgment addresses the issue of condoning the delay in Appeal No. E./2588/2005. The Tribunal, after hearing both sides, decides to condone the delay, allowing the appeal to proceed despite the delay.

Use of Duty-Free Imported Machinery in a 100% EOU for Domestic Production:
The appellants used machinery imported duty-free in their 100% EOU for manufacturing goods for clearance in the Domestic Tariff Area without obtaining permission from the Development Commissioner or the Excise authorities. The Advocate for the appellants argues that there is no legal precedent on the matter but contends that there is no prohibition on using the facilities of a 100% EOU for producing goods for the Domestic Tariff Area. However, the Tribunal prima facie disagrees, stating that a 100% EOU must operate within the scheme and approval granted by the appropriate authorities.

Duty Calculation on Impugned Goods:
The appellants argue that even if duty is payable on the impugned goods, it should be calculated based on the applicable exemption notification and not at the tariff rate. The Tribunal agrees partially with the appellants, directing them to pre-deposit a specific amount and report compliance. The pre-deposit of the balance amount is waived during the appeal's pendency.

Role and Effectiveness of Departmental Representatives in Tribunal Cases:
The judgment criticizes the lack of effective argumentation by the Department's representative, attributing it to the representative's newness to the work. The Tribunal emphasizes the importance of senior officers, specifically Commissioners, arguing cases involving significant revenue or novel arguments. It directs the Joint Commissioner of the Department to appear and argue in future cases of similar nature.

Interpretation of the Provisions of the Central Excise Act Regarding 100% EOUs:
The Tribunal interprets the provisions of the Central Excise Act, noting that a 100% EOU is defined with reference to the Industries (Development and Regulation) Act, 1951. It concludes that such units cannot operate outside the scheme and approval granted by the appropriate authorities. However, it acknowledges the appellants' argument regarding duty calculation and directs them to comply with a pre-deposit while waiving the balance amount during the appeal's pendency.