2007 (3) TMI 480 - AT - Central Excise

Summary

Issues:
Interim stay of impugned order confiscating goods, disallowing Cenvat credit, confirming demand of wrongly availed credit, imposing penalty, and directing payment of interest.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Ahmedabad, involved the issue of granting an interim stay of the impugned order that confiscated goods, disallowed Cenvat credit, confirmed the demand of wrongly availed credit, imposed penalties, and directed payment of interest. The Tribunal considered the activities carried out by the applicant after purchasing duty-paid raw materials, which included packing, re-packing, re-labelling, and pallatization. These activities were found to fall within the extended meaning of "manufacture" as defined in Note 11 of Chapter 29 and Note 5 of Chapter 38. The Tribunal noted that processes such as testing for quality assurance, pasting labels on original packs, cap sealing, and pallatization amounted to manufacturing as per the relevant provisions. Additionally, the Circular dated 16-5-2001 by CBEC declared that activities like labelling or re-labelling of containers in Chapter 30 goods also constituted manufacturing.

The Tribunal acknowledged that the applicant had established a prima facie case for granting an interim stay of the impugned order and waiving the pre-deposit of duty and penalty amounts during the appeal's pendency. Consequently, the Tribunal stayed the impugned order by waiving the pre-deposit of the duty and penalty payable during the appeal process. The applications were allowed, and the appeals were scheduled for final hearing in due course. The judgment emphasized the importance of the activities performed by the applicant in relation to the definition of "manufacture" under the relevant chapters and circulars, leading to the decision to grant interim relief and waive the pre-deposit requirements.

This detailed analysis of the judgment highlights the Tribunal's considerations regarding the manufacturing activities undertaken by the applicant, the applicability of relevant legal provisions and circulars, and the decision to grant interim stay and waiver of pre-deposit based on the prima facie case presented by the applicant.