2013 (12) TMI 873 - AT - Central Excise

Excisability of water treatment plant Waiver of Pre-deposit Held that - Revenue contended that the Applicant had assembled the said industrial treatment plant in their factory and thereafter, cleared in knocked down condition and commissioned at the site of the customer the assessee contended that the various other items, viz. pipes, pipe-fittings, valves etc. required to be laid along with civil foundation, which could be done only at the sites of their customer - excisability of the Water Treatment Plant is highly debatable and rests on the evidences adduced by both sides - the Department during the course of investigation had seized Rs.38.76 lakhs the Applicants offered not to seek refund of the said amount during pendency of the Appeal Thus, the amount seized would be sufficient to hear the appeals pre-deposits waived till the disposal Stay granted.

Summary

Issues:
Waiver of predeposit of duty and penalty under Central Excise Act, 1944 and Rule 209A of Central Excise Rules, 1944.

Analysis:
The Applicants filed two applications seeking waiver of predeposit of duty amounting to Rs.55.07 lakhs, penalty under Section 11AC of the Central Excise Act, and personal penalty of Rs.1.00 lakh on the Director imposed under Rule 209A. The Consultant argued that relevant grounds were not considered during denovo adjudication, emphasizing the excisability of water treatment plants. The Department seized Indian Currency of Rs.38.76 lakhs, but its relation to duty payment was not established. The Consultant cited precedents where water treatment plants were deemed non-excisable once affixed to the customer's site. The dispute centered on industrial water treatment plants, distinguishing them from domestic ones, for which duty was paid. The entire demand was based on the Director's retracted statement.

The Department supported the Commissioner's findings. The Tribunal examined the excisability of water treatment plants, with the Revenue contending that the Applicant assembled and cleared them in knocked down condition. The Applicant argued that assembly required additional items and civil work at the customer's site. The dispute hinged on evidence provided by both sides. Additionally, the Department held Rs.38.76 lakhs seized during investigation. The Consultant offered not to seek refund during the appeal. The Tribunal found the excisability issue debatable, relying on evidence. Considering the seized amount, it granted waiver of predeposit and stayed recovery during the appeal, disposing of the stay petitions.

In conclusion, the Tribunal granted waiver of predeposit of balance dues adjudged and stayed recovery during the appeals, citing the seized amount as sufficient for the purpose. The decision was based on the debatable nature of the excisability issue and the Applicant's prima facie case for waiver.