2008 (3) TMI 618 - AT - Central Excise

Summary

Issues:
1. Pre-deposit requirement for duty demand, redemption fine, and penalty under Section 112(a) for appellants under 100% EOU scheme.
2. Interpretation of the term "manufacture" for export purposes.
3. Applicability of Board's Circular dated 6-5-1997 in determining manufacturing activity for export.

Analysis:
1. The appellants, being 100% EOU importing machineries for scrapping and exporting the segregated scrap, were required to pre-deposit duty demand of Rs. 12,29,944/-, redemption fine of Rs. 8,00,000/-, and penalty of Rs. 5,00,000/- under Section 112(a). The advocate highlighted the appellants' status under the EOU scheme and the revenue's contention that their activity did not amount to manufacture.

2. The advocate referred to the Board's Circular dated 6-5-1997, emphasizing that the term "manufacture" for export has a broader interpretation than Section 2(f) of the Central Excise Act, 1944. The tribunal acknowledged the advocate's argument, indicating a strong case on merits in favor of the appellants regarding the manufacturing activity undertaken by them. Consequently, the tribunal ordered a total waiver of the pre-deposit of the dues demanded in the impugned order.

3. In light of the broader interpretation of "manufacture" for export purposes and the clarification provided in the Board's Circular, the tribunal decided to grant a stay order, preventing any coercive measures until the appeal's disposal. The tribunal also noted that the stay order would continue even after the expiry of 180 days, citing several judgments supporting this decision. The appeal was scheduled for final hearing on 25th May 2009, ensuring a comprehensive review of the case.

This detailed analysis of the judgment highlights the issues related to pre-deposit requirements, the interpretation of "manufacture" for export, and the impact of the Board's Circular on determining manufacturing activities for export purposes.