2014 (1) TMI 54 - AT - Central Excise

Process amount to manufacture or not - Waiver of Pre-deposit Held that - The appellant cannot claim full waiver of pre-deposit further the appellant is not pleading limitation against the demands - there is also no plea of financial hardships in the stay applications - Balance sheet and profit & loss account do not reflect any uncomfortable financial situation of the assessee as on 31-3-2012 - there appears to be considerable improvement of their financial status as decipherable from the documents presented as on 31-3-2012 and as on 31-3-2011 thus, the appellant is directed to pre-deposit 25% of the duty upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery sought by the Appellant for adjudged dues.
2. Whether the process of reclaiming base oil amounts to manufacture and attracts duty of excise.
3. Applicability of case laws cited by the Appellant.
4. Financial hardships claimed by the Appellant.
5. Impact of the interim order of the High Court on the precedential value of previous decisions.

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Analysis:

1. The Appellant sought waiver of pre-deposit and stay of recovery for the adjudged dues totaling Rs. 6,32,56,681/- and Rs. 32,93,415/- for different periods. The demands were related to the commodity termed as "reclaimed base oil." The Appellant argued that the process of reclaiming this oil did not amount to manufacture, hence no duty of excise should be levied. The process involved various steps from collecting waste oil to distillation and clay treatment to produce base oils.

2. The Appellant relied on a previous decision by the Bench in a similar case where it was held that a process akin to the one in question did not amount to manufacture. However, the Commissioner (AR) supported the adjudicating authority's findings and highlighted an appeal filed in the High Court challenging the previous decision, leading to an interim order preventing the use of the previous decision as a precedent. Despite the financial improvement shown in the documents provided, the Appellant was directed to pre-deposit 25% of the duty demanded within a specified time frame.

3. The Bench considered the loss of precedent value of the cited case law due to the High Court's interim order and the absence of financial hardship pleas in the stay applications. While acknowledging the financial improvement of the Appellant, the plea of financial hardships was taken into account in determining the pre-deposit amount. Ultimately, the Appellant was granted waiver and stay for the balance dues upon compliance with the pre-deposit requirement.

4. The judgment carefully weighed the legal arguments, the impact of the High Court's interim order, and the financial circumstances of the Appellant before arriving at the decision to grant partial waiver and stay. The detailed analysis of the process involved in reclaiming base oil and the legal precedents cited by both parties played a crucial role in the final determination of the case.

5. The judgment showcases a balanced approach in considering legal precedents, financial aspects, and the specific details of the case to arrive at a fair decision regarding the waiver of pre-deposit and stay of recovery sought by the Appellant.