2005 (3) TMI 650 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of central excise duty and penalty for M/s. Chokkiyan Karthikeyan & Co.

Analysis:
The case involved an application by M/s. Chokkiyan Karthikeyan & Co. for the waiver of pre-deposit of central excise duty amounting to Rs. 19,82,315/- and a penalty of Rs. 5,00,000/-. The appellant argued that they were not liable to pay central excise duty on PSC Poles as they were only contractors hired by TNEB, who was the registered manufacturer and had taken Modvat credit for the duty paid on inputs. The appellant distinguished their case from a previous judgment. On the other hand, the respondent contended that the appellant was indeed manufacturing PSC poles as they were awarded a contract by TNEB, paying rent for the premises, and thus operating as manufacturers in their own place. The Tribunal considered both arguments and clarified that the appellant, being awarded a contract to manufacture PSC poles for TNEB, was not merely a hired workman but operated on a principal to principal basis with TNEB. It was established that the actual manufacturer, in this case, TNEB, had the duty to discharge the duty demanded. Consequently, the Tribunal directed the appellant to deposit Rs. 4,00,000/- within six weeks and granted a waiver for the remaining duty and penalty, with a stay on recovery during the appeal's pendency. The case was scheduled for compliance reporting on 16-5-2005.