1999 (5) TMI 303 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery of demanded duty.
2. Classification of effluent treatment plant under Tariff Heading 84.19.
3. Time limitation for duty demand.
4. Suppression of facts regarding supervision over erection and commissioning.
5. Applicability of penalty under Section 11AC.

Analysis:

Issue 1:
The appellant sought waiver of pre-deposit and stay of recovery of duty amounting to Rs. 75,32,889 demanded on the effluent treatment plant system sold to customers from 1991-92 to 1995-96. The advocate argued for similar treatment as the duty amount imposed. The Tribunal granted the stay of recovery unconditionally.

Issue 2:
The dispute involved the classification of the effluent treatment plant under Tariff Heading 84.19. The appellant contended that the plant, assembled on-site piece by piece, constituted immovable goods and was not liable to duty. The respondent argued that the plant was sold as a single item, relocatable, falling under the said Tariff Heading. Reference was made to judgments like "Mittal Engineering" and "Sirpur Paper Mills" to support their respective contentions.

Issue 3:
Regarding the time limitation for duty demand, the appellant claimed that the entire demand was time-barred as the show cause notice was issued beyond the statutory period of 6 months. The appellant highlighted a letter from 1989 confirming the nature of their activities, suggesting no requirement for Central Excise Law formalities. The Tribunal found a strong prima facie case on limitation, considering the endorsement on the 1989 letter.

Issue 4:
The contention of suppression of facts regarding supervision over erection and commissioning of the plant was raised. The respondent argued that the appellant's failure to disclose this supervision warranted a longer limitation period for the Revenue. The Tribunal, however, found the appellant's 1989 letter comprehensive and maintained that the supervision activity did not constitute manufacturing.

Issue 5:
Regarding the applicability of penalty under Section 11AC, the Tribunal noted that the period in question preceded the insertion of this section, thus ruling out the imposition of any penalty on the appellant. The Tribunal allowed the Stay Petition unconditionally, considering the absence of penalty liability.

In conclusion, the Tribunal granted the appellant's request for waiver of pre-deposit and stay of recovery, upheld the classification of the effluent treatment plant under Tariff Heading 84.19, found a strong prima facie case on limitation, dismissed the suppression of facts argument, and ruled out the imposition of penalty under Section 11AC due to the timeline involved.