2005 (1) TMI 516 - AT - Central Excise

Summary

Issues: Application for waiver of pre-deposit of Central Excise duty.

Analysis:
The judgment pertains to an application by M/s. Ajanta Tubes Ltd. for the waiver of pre-deposit of Central Excise duty amounting to Rs. 3,07,844. The appellant had purchased pipes and tubes from the market, carrying out various processes such as end facing, hydro testing, galvanization, and stamping before clearance. The Revenue disallowed Modvat credit, contending that the processes did not constitute manufacturing, thus making Modvat credit unavailable. The appellant argued that even if the processes were not considered manufacturing, the duty paid could be seen as a reversal of the Modvat credit. The Senior Departmental Representative supported the Revenue's findings. The Tribunal noted that the appellant had indeed cleared the goods by paying duty, creating a strong prima facie case in their favor. Consequently, the recovery of the confirmed amount was stayed during the appeal's pendency, scheduled for regular hearing on 31-3-2005. The decision was pronounced in court by Member (T) V.K. Agrawal.

This case primarily revolves around the eligibility of M/s. Ajanta Tubes Ltd. for Modvat credit concerning the processes undertaken on purchased pipes and tubes. The dispute centers on whether these processes amount to manufacturing, impacting the availability of Modvat credit. The appellant's argument that the duty paid should be considered a reversal of Modvat credit, even if the processes are not classified as manufacturing, forms a crucial aspect of the case. The Revenue's contention that the processes do not qualify as manufacturing plays a pivotal role in determining the applicability of Modvat credit. The Tribunal's decision to stay the recovery of the confirmed amount pending the appeal reflects the recognition of a strong prima facie case in favor of the appellant, emphasizing the significance of the issues raised in the application for waiver of pre-deposit of Central Excise duty.