2005 (1) TMI 214 - AT - Central Excise

Summary

Issues:
1. Pre-deposit requirement for duty amount, penalty, and personal penalty.
2. Classification of the item as movable or immovable property.
3. Consideration of time bar for the demands.
4. Contention regarding financial hardship and intention to evade payment of duty.
5. Stay application and waiver of pre-deposit.

Analysis:

Issue 1: Pre-deposit requirement
The appellants were required to pre-deposit a substantial duty amount, penalty, and personal penalty. They argued that as a Small Scale Industry engaged in manufacturing Solar powered Electric Power Fence System, the item only comes into existence upon erection on the earth or walls. They contended that due to their small scale and marginal profit, they were unable to pre-deposit the demanded amount. Additionally, they claimed no intention to evade duty payment.

Issue 2: Classification of the item
The Commissioner considered the item as a movable fence based on the appellants' marketing and lack of declarations or licenses. However, the Tribunal analyzed Supreme Court rulings and physical evidence of the fixed nature of the fence. They opined that the electrified barbed fence could be deemed immovable due to being embedded in the earth or walls. This interpretation was supported by the appellants' genuine belief regarding the nature of the product.

Issue 3: Time bar for demands
The appellants argued that the demands were time-barred as they believed, in good faith, that the activity did not create dutiable goods based on Supreme Court judgments and Board Circulars. The Tribunal found merit in this argument, considering the appellants' belief and the nature of the product.

Issue 4: Financial hardship and intention
The appellants highlighted financial hardship and lack of intent to evade duty payment. They emphasized their belief in the non-dutiable nature of the product based on legal precedents and circulars. The Tribunal, taking into account the overall circumstances, including financial difficulties, found grounds to grant a waiver of pre-deposit and stay the recovery of the amounts.

Issue 5: Stay application and waiver
Considering the appellants' genuine belief, financial constraints, and the fixed nature of the fence, the Tribunal allowed the stay application. Acknowledging the substantial amounts involved, the Tribunal scheduled an expedited hearing for the appeal, demonstrating a balanced approach towards the appellants' circumstances. The appeal was set for a hearing on a specific date to address the issues comprehensively.