2007 (3) TMI 138 - AT - Central Excise

Manufacture - Alleged that appellant process of shaping, trimming, cutting, and turning and making the rough rolls suitable for rolling mills amount to manufacture and accordingly demand were made along with penalty - Held that allegation was not correct and set aside

Summary

Issues:
1. Delay of nearly 8 years in filing the appeal.
2. Request for waiver of pre-deposit due to financial hardship.
3. Whether the operations carried out by the appellants amount to manufacture.
4. Entitlement to Modvat credit and benefit of Notifications.

Analysis:
1. The appeal was filed against an Order-in-Appeal dated 7-5-1999, but the appeal itself was preferred only on 5-2-2007, resulting in a significant delay. The appellant attributed this delay to various factors, including the closure of their operation in 1998 and challenges in obtaining the order copy. The appellant sought condonation of the delay, emphasizing the lack of wilful delay on their part. The Tribunal, considering the absence of proof of service of the order, held that the order was served only on 2-2-2007, thereby justifying the appeal filed on 5-2-2007. Consequently, the delay was condoned, and the stay application and appeal were to be decided.

2. The appellant requested waiver of the pre-deposit due to financial constraints resulting from the permanent closure of their factory. The consultant relied on previous decisions where pre-deposit was waived in similar circumstances. After hearing both sides, the Tribunal agreed that the Commissioner should have waived the pre-deposit considering the appellant's financial difficulties. Consequently, the application for stay was allowed, and the appeal was to be heard on merits.

3. The appellants argued that the operations they conducted, such as shaping, trimming, cutting, and turning rough rolls, did not amount to manufacture, absolving them of duty liability and the need to reverse Modvat credit. They also claimed entitlement to benefits under specific notifications. Citing a previous decision involving the same appellants, the Tribunal concurred that the operations did not constitute manufacture. The appeal was allowed based on this finding, granting consequential relief to the appellants.

4. The Tribunal, after considering the arguments presented and the precedents cited, concluded that the pre-deposit should have been waived due to the appellant's financial situation. Additionally, the operations conducted by the appellants were deemed not to amount to manufacture, aligning with previous decisions. As a result, the appeal was allowed with consequential relief, providing a favorable outcome for the appellants.

This detailed analysis of the judgment covers the issues of delay in filing the appeal, waiver of pre-deposit, the manufacturing status of the operations, and the entitlement to specific benefits, providing a comprehensive understanding of the Tribunal's decision.