2011 (7) TMI 1279 - AT - Service Tax

Summary

Issues:
1. Central excise duty liability on Roller Blinds/Vertical Blinds.
2. Duty demand, interest, and penalties imposed on the Appellant.
3. Adjudication by the Commissioner and subsequent appeals.
4. Classification of goods and sustainable nature of the impugned order.

Analysis:

1. Central Excise Duty Liability:
The case revolved around the central excise duty liability on Roller Blinds/Vertical Blinds manufactured and installed by the Appellant using Aluminum Sections, clamps, and fiber glass sheets. The department issued a show cause notice alleging duty liability, leading to a demand for duty, interest, and penalties under the Central Excise Act.

2. Duty Demand and Penalties:
The Commissioner, in the Order-in-Original, confirmed a duty demand of Rs. 59,35,572 against the Appellant, along with interest and penalties under relevant sections of the Central Excise Act and Rules. Additionally, a penalty of Rs. 10 Lakhs was imposed on the General Manager of the Appellant company.

3. Adjudication and Appeals:
The Commissioner's order was challenged through appeals and stay applications. Despite being listed for hearing of stay applications, the Tribunal decided to proceed with final disposal, waiving the pre-deposit requirement. The Tribunal heard both sides and found that the matter could be taken up for final disposal.

4. Classification and Sustainability of Order:
The Appellant argued that their activity did not amount to manufacture and that they were paying service tax as interior decorators. The Tribunal noted that the Commissioner's order was ex parte, failing to consider key aspects such as the classification of goods and the dual nature of the Appellant's activities as both taxable service and manufacture. As a result, the Tribunal set aside the impugned order, remanding the matter to the Commissioner for fresh adjudication after hearing the Appellant and providing a clear finding on the classification of goods.

In conclusion, the Tribunal found the impugned order unsustainable due to procedural irregularities and lack of consideration for crucial aspects of the case. The matter was remanded for re-adjudication, emphasizing the need for a clear determination on whether the Appellant's activities constituted manufacture and the appropriate classification of goods.