1993 (12) TMI 167 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit and stay on recovery of demanded duty on assembly of electric generating sets.
2. Classification of electric generating set under Heading 85.02 and liability to duty.
3. Availability of Modvat credit and non-addition of margin of profit in valuation.
4. Re-examination of new points by lower authorities and quantification of duty demand.

Analysis:

1. The appellant's advocate prayed for waiver of pre-deposit and stay on the recovery of duty demanded on the assembly of electric generating sets. The advocate argued that the sets should not be considered goods due to being embedded in a foundation, and the duty amount should be reduced considering Modvat credit and profit margin issues. The advocate requested a reduced pre-deposit amount of Rs. 2,32,955.29, subject to re-examination of the Modvat credit and profit margin points.

2. The respondent's representative did not contest the availability of Modvat credit or the Supreme Court's ruling on profit margin. The tribunal found that the electric generating sets should be classified under Heading 85.02 and held the applicants liable for duty on the assembly. The tribunal disagreed with the argument that the sets were immovable property and directed the applicants to pre-deposit Rs. 2,32,955.29 within four weeks for re-examination of the Modvat credit and profit margin issues by the lower authorities.

3. The tribunal emphasized that the lower authorities should re-examine the availability of Modvat credit and the non-addition of profit margin in the valuation of the sets. The applicants were instructed to comply with the pre-deposit requirement, and the matter was remanded to the adjudicating authority for a re-evaluation of the two new points raised by the applicants. The quantification of the duty demand would be done after hearing the applicants in line with the principles of natural justice.

4. The stay petition and appeal were disposed of with the direction for the applicants to pre-deposit the specified amount and for the lower authorities to re-examine the Modvat credit and profit margin issues. The tribunal ensured that the adjudication process would consider the arguments raised by the applicants and determine the final duty demand accordingly.