2001 (6) TMI 458 - AT - Central Excise

Issues:
1. Waiver of pre-deposit of Central Excise duty and penalties.

Analysis:
1. The appellant, M/s. Indian Oil Corporation Limited, filed an application seeking waiver of pre-deposit of Central Excise duty amounting to Rs. 26,52,878.00 and equal penalties imposed under Section 11AC and Section 173 of the Central Excise Rules. The appellant argued that they were not involved in the fabrication of 9 storage tanks, as the fabrication work was subcontracted to M/s. Arunoday Steel Industries (ASI). The appellant contended that ASI, being the actual fabricator, should be liable for any Central Excise duty. The appellant relied on legal precedents to support their claim, emphasizing that the tanks were fabricated on-site and became part of immovable property, thus not meeting the criteria of being considered as "goods." The appellant also raised concerns regarding the relevant date for the demand, asserting that the tanks existed before the specified date. The appellant's senior advocate presented a strong case challenging the liability for duty based on the manufacturing process and ownership of the fabricated tanks.

2. On the other hand, the respondent, represented by Shri M.P. Singh, opposed the appellant's prayer for waiver. The respondent argued that M/s. ASI admitted to being hired labor for manufacturing goods supplied by M/s. EPIL on behalf of the appellant. It was contended that the duty should be paid by the appellant, who was considered the primary manufacturer. The respondent highlighted that the appellant supplied machinery for tank fabrication, making them responsible for the duty. Additionally, the respondent disputed the appellant's claim regarding the limitation period for duty demand, asserting that payment was not the sole criterion for duty liability. The respondent's contention was that duty becomes applicable when the goods are put to captive use, irrespective of payment status. The respondent refuted the appellant's claim that necessary machinery for tank fabrication was not provided by the appellant.

3. After considering the arguments from both sides, the Tribunal found merit in the appellant's submissions. The Tribunal acknowledged the appellant's strong prima facie case regarding the fabrication process of the tanks and the question of the actual manufacturer. Consequently, the Tribunal granted the waiver of pre-deposit of the entire duty and penalties, staying the recovery during the appeal's pendency. The decision was based on the lack of rebuttal to the appellant's assertions and the compelling arguments presented by the appellant's senior advocate, supporting the waiver of pre-deposit.

This detailed analysis of the judgment from the Appellate Tribunal CEGAT, New Delhi, provides a comprehensive overview of the issues involved, the arguments presented by both parties, and the Tribunal's decision to grant the waiver of pre-deposit based on the merits of the case.

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