2006 (6) TMI 338 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of duty and penalty, whether certain processes amount to manufacture, limitation period for demand.

Analysis:
The case involves an application for waiver of pre-deposit of duty and penalty amounting to Rs. 2,72,270/- and Rs. 25,000/- respectively. The Commissioner of Central Excise (Appeals) upheld the adjudication order, stating that processes like fluid level checking, AC performance checking, and functional checks of electrical systems of vehicles do not constitute manufacture. The duty was demanded due to availing Cenvat credit at a higher rate and subsequent removal of cars after payment of duty. The show cause notice was issued in July 2004, while the clearances of vehicles for the second time, post testing at the Automobile Research Association of India, Pune (ARAI), were in June and October 2003.

The Tribunal, comprising Ms. Jyoti Balasundaram and Dr. Chittaranjan Satapathy, found no merit in the argument that the post-ARAI tests amounted to manufacture. The applicants failed to prove the limitation period defense, as they could not provide evidence of declaration of clearances of vehicles for the second time at the correct duty rate. The Tribunal directed the applicants to deposit Rs. 1 lakh towards duty within four weeks to waive the pre-deposit of the remaining duty and penalty, with a warning that non-compliance would lead to the vacation of stay and dismissal of the appeal without further notice.

The compliance deadline was set for 24-7-2006. The judgment was delivered by Vice-President Jyoti Balasundaram, with the order pronounced in open court. The decision highlights the importance of timely compliance with duty obligations and the need to provide sufficient evidence to support claims, especially regarding duty rates and clearances of goods.