2006 (8) TMI 409 - AT - Central Excise

Summary

Issues:
1. Challenge to the order of Commissioner (Appeals) regarding the classification of the appellant as a manufacturer of pipes.
2. Dispute over whether the goods manufactured were excisable.
3. Time limitation for issuing the show cause notice under Section 11A of the Central Excise Act, 1944.

Analysis:
1. The Appellate Tribunal considered the challenge raised by the appellant against the order of the Commissioner (Appeals) regarding the classification of the appellant as a manufacturer of pipes. The Additional Commissioner of Central Excise had concluded that the appellant was the actual manufacturer based on the terms of the agreement and the control exercised by the appellant over the manufacturing process. The Commissioner (Appeals) also observed that the appellant had provided raw materials and maintained quality control, further supporting the classification as a manufacturer under Central Excise law.

2. The appellant contended that the goods manufactured by their subcontractor were shells, not excisable pipes. They argued that the show cause notice was time-barred, citing the date of bills raised by the subcontractor and the date of receipt of the notice. However, the Additional Commissioner of Central Excise justified the timeliness of the notice based on the continuous manufacturing and supply of pipes by the appellant until the last bill issued in December 1998. The Tribunal found the observations of the Additional Commissioner acceptable and agreed with the conclusion that the goods manufactured were indeed excisable pipes.

3. Regarding the time limitation for issuing the show cause notice under Section 11A, the Tribunal upheld the decision that the notice was within the prescribed time frame. The Tribunal referenced a Supreme Court judgment to support the notion that in cases of continuing violations, duty can be demanded at any point in time. Consequently, the Tribunal directed the appellant to deposit the duty demanded under the order within a specified period to stay the implementation of the order, emphasizing the importance of compliance within the given timeline to avoid dismissal of the appeal.

In conclusion, the Appellate Tribunal upheld the classification of the appellant as a manufacturer of excisable pipes, rejected the argument that the goods were not excisable, and affirmed the timeliness of the show cause notice under Section 11A. The Tribunal provided guidance on the pre-deposit of duty to ensure compliance with the interim stay of the order pending further proceedings.