1992 (5) TMI 104 - AT - Central Excise

Issues:
1. Application for waiver of pre-deposit of duty and penalty.
2. Classification of goods and excisability.
3. Financial hardship and closure of the unit.

Analysis:
1. The judgment involves an application for waiver of pre-deposit of duty and penalty amounting to Rs. 25,19,009/- and Rs. 2,50,000/- respectively, levied on the petitioner, who is the Proprietor of M/s. Jaycee Engineering Services. The petitioner argued that the goods manufactured, classified under specific headings of the Central Excise Tariff, are semi-finished goods not excisable under the Act. Reference was made to Trade Notice No. 197/88 to support the contention that the supplier of raw material should discharge the duty liability for goods sent for job work. The petitioner also claimed exemption based on the value of clearances falling within the small scale unit limit for certain years. Additionally, the financial position of the petitioner's company, which was closed in August 1990, was highlighted to request a waiver of the pre-deposit.

2. The adjudicating authority upheld the duty liability on the petitioner, considering the nature of goods manufactured, excisability, and marketability. The authority referenced Supreme Court rulings, High Court decisions, Section 2(f) of the Act, and Rule 2A of the Interpretative Rules in its decision. The authority noted the petitioner's failure to file a declaration or obtain a license as required by law. The Tribunal found no prima facie infirmity in the authority's reasoning and directed the petitioner to make a pre-deposit of Rs. 5,00,000/- by a specified date, with the balance of duty and penalty dispensed pending appeal.

3. The judgment also addressed the financial hardship and closure of the petitioner's unit. The petitioner's consultant argued that the goods produced on job work basis did not qualify as finished goods for excise duty purposes. However, the Tribunal observed that the lower authority had considered the processes carried out by the petitioner and the distinct character acquired by the goods, upholding the duty liability. Despite the absence of specific details regarding the specifications of the goods, the Tribunal found no infirmity in the lower authority's decision. The Tribunal emphasized the importance of providing factual evidence in such cases. Considering the financial status of the petitioner and the turnover reflected in the Balance Sheet, the Tribunal agreed to waive the balance of duty and penalty upon the pre-deposit of Rs. 5,00,000/- by a specified deadline.

4. A concluding observation highlighted the need for Departmental authorities to conduct enquiries into the financial position of appellants in cases involving substantial revenues. The Tribunal noted that such inquiries are often lacking, leading to decisions based solely on the appellants' submissions. The Department was advised to proactively gather financial information upon receiving stay applications to safeguard the interests of revenue when issuing stay orders.

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