2007 (2) TMI 506 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are waiver of pre-deposit of Central Excise duty amounts demanded for telephone exchanges, penalties imposed on the ground of duty evasion, and whether telephone exchanges are marketable commodities.

Waiver of Pre-deposit of Central Excise Duty:
The applicant, BSNL, prayed for waiver of pre-deposit of Central Excise duty amounts demanded for telephone exchanges. The adjudicating authority considered telephone exchanges as marketable commodities. However, it was noted that the field of telecommunication is regulated by statute, and the areas earmarked for telephone exchanges are also regulated. The instruments used for setting up telephone exchanges are purchased from manufacturers who have already paid excise duty on such instruments. Considering these facts, the tribunal directed an interim stay of the impugned order without the requirement of pre-deposit of duty and penalty amounts during the appeal's pendency. The tribunal allowed all three applications, and the appeals will proceed for final hearing in due course.

Nature of Telephone Exchanges as Marketable Commodities:
The tribunal deliberated on whether telephone exchanges can be considered marketable commodities. It was observed that when telephone exchanges are installed in an area, they get commissioned for that specific area. Given the regulation of the telecommunication field by statute and the specific areas earmarked for telephone exchanges, it was deemed challenging to view them as marketable commodities. The manufacturing of instruments for telephone exchanges is tailored for commissioning in particular areas, and these instruments are procured from manufacturers who have already paid excise duty on them. Therefore, based on the circumstances of the case, the tribunal granted interim stay of the impugned order without the need for pre-deposit of duty and penalty amounts during the appeal process.