2014 (1) TMI 573 - AT - Central Excise

Activity manufacture or not - Fabrication and manufacture of various articles of iron - Waiver of Pre-deposit - Held that - Following Mahindra & Mahindra Ltd. vs. CCE, Aurangabad, Chandigarh, Kanpur & Chennai 2005 (11) TMI 103 - CESTAT, NEW DELHI - Prior to the Mahindra & Mahindra Ltd. case, the issue of excisability of fabrication of items were highly debatable and it has been decided in favour of the assessee - the applicant made an offer to deposit Rupees Fifteen Lakhs as pre-deposits which is accepted upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
Seeking waiver of pre-deposit of duty and penalty under section 11AC of Central Excise Act.

Analysis:
The appellant sought waiver of pre-deposit of duty amounting to Rs.1.05 crores and an equal penalty under section 11AC of the Central Excise Act, along with a penalty of Rs.10,00,000 on the Director of the applicant. The appellant's advocate argued that the fabrication of various iron articles within the factory premises was considered non-excisable due to the absence of manufacturing activity, relying on precedents like Aruna Industries Vishakhapatnam and Elecon Engineering Co. Ltd. However, it was acknowledged that post the decision in Mahindra & Mahindra Ltd. case, these precedents were no longer valid. The advocate contended that a significant portion of the demand was time-barred, offering to deposit an additional Rs.15,00,000 on top of the Rs.4,00,000 already paid during the investigation.

Analysis:
The Advocate for the appellant highlighted the historical debate on the excisability of fabricating various items, emphasizing that prior to the Mahindra & Mahindra Ltd. case, the issue was contentious and often decided in favor of the assessee. The Tribunal noted that the issue was settled only after the larger Bench decision in the Mahindra & Mahindra case. Considering the circumstances, the Tribunal accepted the appellant's offer to deposit Rs.15,00,000 within eight weeks, in addition to the Rs.4,00,000 already deposited. It was ruled that upon this deposit, the balance amount of dues would be waived, and recovery stayed during the appeal's pendency. Failure to comply with the deposit requirement would lead to the dismissal of both appeals without further notice, with a compliance report due on 03.06.2013.