1990 (1) TMI 259 - AT - Central Excise

Summary

Issues:
- Appeal against order passed by CCE, Guntur
- Pre-deposit of duty amount
- Classification of goods as excisable
- Financial position of the applicants
- Stay application and conditions for dispensing with pre-deposit

Analysis:

1. The applicants filed an appeal against the order by CCE, Guntur, seeking dispensation of the pre-deposit of duty amount of Rs. 1,14,28,688. The applicants argued that the goods they manufactured for the Ministry of Defence were not marketable and hence not excisable, citing relevant legal provisions and judgments, including the Supreme Court's decision in CCE v. Amba Lal Sarabhai. They emphasized the nature of the contract work and the specific items involved, asserting that the goods were not suitable for sale in the market.

2. The respondent, represented by SDR, contended that the goods were marketable and intended for a specific purpose, relying on the Supreme Court's judgment in a previous case. They highlighted the financial position of the applicants, indicating profit-making operations and dividend distributions. The respondent cited various judgments to support their argument, including Andhra Sugars Ltd. v. Collector and Ujagar Paints v. U.O.I.

3. The Tribunal noted that the facts were undisputed, with the erection work done at the site. The Tribunal compared the present case with previous judgments, particularly Aruna Industries, and distinguished it from Richardson & Cruddes. The Tribunal inquired about the quantum of clearance and examined the financial statements of the applicants to assess their profit-making status and liquidity position.

4. Considering the facts and circumstances, the Tribunal found merit in the applicant's case up to a certain date but refrained from expressing a final opinion due to the pending nature of the matter. The Tribunal dispensed with the pre-deposit of the duty amount, subject to the applicants depositing Rs. 28,00,000 in cash in four equal instalments. The order specified the deadlines for each instalment and warned of automatic vacation of the stay order in case of default. Additionally, the Tribunal directed the Revenue authority to halt recovery proceedings during the appeal's pendency.

This detailed analysis covers the key issues raised in the judgment, addressing the legal arguments, financial considerations, and procedural aspects involved in the case.