2009 (6) TMI 797 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of central excise duty and penalty based on the contention that the appellant is not the manufacturer of the goods in question but that the independent job workers were the manufacturers.

Analysis:
The judgment by the Appellate Tribunal CESTAT, Chennai, involved the consideration of an application for the waiver of pre-deposit of central excise duty and penalty amounting to Rs. 1,32,05,174/- against the appellant, who is the proprietor of two entities involved in the manufacturing of scaffolding, shuttering, and propping materials during the period 2004-05 to 2006-07. The appellant contended that the manufacturing activities were carried out through independent job workers after procuring purchase orders from customers, and the proprietary concern did not possess the necessary machinery or facilities for manufacturing the items in question.

The Tribunal found the appellant's contention prima facie acceptable based on several factors. Firstly, there was no panchnama drawn up for machinery manufacture for goods like drilling machines, shuttering machines, welding machines, and cutting machines. Additionally, the adjudicating authority noted a lacuna in the investigation regarding the establishment of the presence of any machinery on the applicant's premises. Furthermore, the statement of the applicant, relied upon by the Revenue, indicated that the work was indeed done through job workers, some of whom were not traceable. Only a few job workers were available and produced for cross-examination before the Commissioner.

Considering these factors, the Tribunal concluded that the appellant had made a strong case for unconditional waiver of pre-deposit of duty and penalty. The Tribunal determined that the appellant was not the actual manufacturer of the goods in question, and it was the independent job workers who were responsible for manufacturing the items. Therefore, the Tribunal granted the waiver of pre-deposit of duty and penalty, and stayed the recovery pending the appeal. The order was pronounced and dictated in the open court, providing relief to the appellant based on the established facts and contentions presented during the proceedings.