1999 (9) TMI 475 - AT - Central Excise

Summary

Issues:
1. Pre-deposit of duty amount and penalty under Rule 173Q.
2. Confirmation of penalty under Section 11AC of the Act.
3. Classification of goods under Chapter heading 8708.00.
4. Plea of non-manufacture by the appellants.
5. Plea of demands being barred by limitation.
6. Financial hardships of the appellants.
7. Prima facie case for waiver of amounts.
8. Consideration of valuation under Section 4(1)(b).

Analysis:
1. The appellants were required to pre-deposit duty amount and penalties as confirmed by the Additional Commissioner, which were contested by the appellants. The Commissioner (Appeals) held that the appellants failed to show a prima facie case for waiver due to lack of evidence supporting financial hardships, resulting in the dismissal of the appeal under Section 35F of the Act.

2. The appellants argued that their activities did not amount to manufacturing goods, as they were only cutting and punching holes in raw materials received from another company. They claimed that the demands were time-barred and highlighted their status as a Small Scale Industry (SSI) with limited turnover. The appellants sought waiver of the amounts based on their plea and financial constraints.

3. The Additional Commissioner's detailed adjudication concluded that the appellants' activities did result in the production of motor vehicle parts, which were acknowledged by the Managing Director and other company officials. The Commissioner (Appeals) upheld this finding and rejected the appellants' contention, emphasizing the marketability of the produced parts and the suppression of information regarding the activity.

4. The Tribunal reviewed the evidence and financial status of the appellants, noting their turnover and the amount already pre-deposited. Considering the potential hardship if the entire amount was to be paid, the Tribunal directed the appellants to pre-deposit a reduced sum within a specified timeframe. The balance of duty, penalty, and penalty imposed was waived pending the Commissioner (Appeals) revisiting the case on its merits.

5. The Tribunal allowed the appeal by remanding the matter to the Commissioner (Appeals) for a fresh decision after the required pre-deposit by the appellants. The Commissioner (Appeals) was instructed to consider the case in light of the pre-deposit and provide a fair opportunity for the appellants to present their arguments before reaching a final decision in accordance with the law.