2012 (12) TMI 585 - AT - Central Excise

Manufacture - immovability - assembly botorized blinds - stay - held that - the fabric is fixed to the Aluminum tubes in the factory and besides this, in the case of motorized blinds, the motor is also fixed in these tubes at this stage. Therefore, the blinds which are chargeable to duty under Tariff sub-heading 39252000, 630300 and 70199000 came into existence in the factory premises and these blinds are installed at site. Prima facie, we are also of the view that since these blinds can be shifted, though in dismantled condition, the same cannot be said to be part of immovable property. Though the appellant plead that during the period of dispute they were registered with the central excise authority for payment of service tax, earlier under Heading installation services and subsequently under work contract services , it is not known as to whether their activity of assembly of roller/vertical blinds had been disclosed by them from the central excise authorities. In any case, the question of limitation being a mixed question of law and facts can be examined only at the time of final hearing. Thus this is not a case of granting un-conditional waiver from the provisions of Section 35F and as such, the amount of Rs.15 Lakh paid by the appellant, during investigation, is not sufficient for safeguarding the interests of revenue. Though the appellant pleaded that they have paid the service tax of Rs.14 Lakhs, this service tax is obviously on the service component. The appellant company is, therefore, directed to deposit an amount of Rs.7 lakhs within a period of 8 weeks from the date of this order on deposit of this amount the requirement of pre-deposit of balance amount of duty demand, interest thereon and penalty and the requirement of pre-deposit of penalty by General Manager of the Appellant company shall stand waived.

Summary

Issues:
1. Classification of roller blinds made of non-textile materials under Central Excise Tariff.
2. Whether the roller/vertical blinds come into existence at the site or in the factory.
3. Applicability of duty and penalty on the roller/vertical blinds.
4. Disclosure of manufacturing activity to the central excise authorities by the appellant.
5. Requirement of pre-deposit for hearing the appeals and stay of recovery.

Issue 1: Classification of roller blinds made of non-textile materials under Central Excise Tariff

The dispute revolved around the classification of roller blinds made of non-textile materials under the Central Excise Tariff. The Commissioner held that roller/vertical blinds made of fabrics from different chapters are classifiable under specific sub-headings of the Tariff. The duty demand, interest, and penalties were confirmed based on this classification.

Issue 2: Origin of roller/vertical blinds at site or in the factory

The appellant argued that the roller/vertical blinds come into existence at the site during installation and become part of the immovable property. However, the Tribunal found that the blinds were fixed to aluminum tubes in the factory, including the installation of motors in motorized blinds. Thus, the blinds were deemed to have originated in the factory premises.

Issue 3: Applicability of duty and penalty

The Commissioner confirmed the duty demand, interest, and penalties on the appellant company and the General Manager under specific provisions of the Central Excise Act. The Tribunal directed the appellant to deposit a specific amount within a stipulated period to waive the pre-deposit requirement for further proceedings.

Issue 4: Disclosure of manufacturing activity

The appellant contended that they had treated their activity as a service, paying service tax under different categories to the central excise authorities. However, it was questioned whether the manufacturing of roller/vertical blinds was disclosed to the authorities. The Tribunal noted that the question of limitation could be examined during the final hearing.

Issue 5: Requirement of pre-deposit and stay of recovery

The Tribunal directed the appellant company to deposit a specific amount within a set timeframe to waive the pre-deposit requirement for the duty demand, interest, and penalties. Compliance was to be reported by a specified date, and recovery was stayed pending the appeal's disposal.

This detailed analysis of the judgment provides insights into the classification, origin, applicability of duty and penalties, disclosure obligations, and pre-deposit requirements concerning the manufacturing and installation of roller/vertical blinds made of non-textile materials under the Central Excise Tariff.