2005 (10) TMI 308 - AT - Central Excise

Summary

Issues:
Stay applications for recovery of duties demanded from the applicant for hearing the appeals. Applicability of exemption Notification No. 74/93-C.E., dated 28-2-1993 to Madhya Pradesh State Electricity Board's manufacturing activities.

Analysis:
The case involved two stay applications filed by the Madhya Pradesh State Electricity Board to halt the recovery of duties demanded from them for hearing the appeals. The Board's workshop manufactured various transmission power parts, structures, and line materials, leading to duty demands under specific sub-headings of the Central Excise Tariff Act, 1985. Initially, the case reached the Supreme Court, which remanded it back to the Tribunal for re-examination. Subsequently, the Tribunal remanded the case to the original authority, resulting in the dropping of the demand. However, the Revenue appealed before the Commissioner (Appeals), who ruled in favor of charging duty from the applicant, prompting the filing of present appeals and stay applications to prevent the recovery of the dues.

The applicants contended that they qualified for exemption under Notification No. 74/93-C.E., dated 28-2-1993, as a State Government entity utilizing parts manufactured in their factory owned by the State Government. They cited a Tribunal decision in a similar case to support their claim. On the other hand, the Revenue argued that the workshop where the goods were produced did not qualify as a factory, challenging the applicability of the exemption notification based on the manufacturing location.

Upon evaluating the arguments, the Tribunal referred to a previous decision regarding the applicability of the exemption notification to goods manufactured by State Electricity Boards. It acknowledged that the workshop, despite being referred to as such, constituted a factory of the Madhya Pradesh State Electricity Board where excisable goods were produced. Consequently, the Tribunal deemed the exemption notification prima facie applicable and granted a stay on the recovery of duties pending the appeal hearings, emphasizing that the workshop indeed qualified as a factory under the Central Excise Act.

In conclusion, the Tribunal disposed of the stay applications accordingly, providing relief to the Madhya Pradesh State Electricity Board by staying the recovery of duties until the appeals were heard, based on the prima facie applicability of the exemption notification to their manufacturing activities.