2013 (10) TMI 193 - AT - Central Excise

Activity Manufacture OR Not - Waiver of Pre-deposit The main appellant is carrying out the processes of packing, repacking, relabeling etc. of the battery operated bikes at their premises which according to Revenue amounts to manufacture as per the amended definition of manufacturer given in Section 2 (f) (iii) of the Central Excise Act, 1944 - Held that - From the classification of vehicles made in the IDRA, 1951, it is clear that all the vehicles used for transportation like Motor Cycle, Scooters and Bikes are considered as Automobiles - A Bicycle, Fork lift truck, Tractors etc. will not be automobile - A battery operated bike will be a self-performed vehicle like a scooter or a Motorcycle meant for transportation of goods/ humans will, prima facie, be a category of automobiles - Appellants have, therefore, not made out a prima facie case for full waiver of pre-deposit of confirmed dues and penalties and are required to be put to certain conditions - Partial stay granted.

Issues:
1. Whether the battery-operated bikes manufactured by the main appellant qualify as automobiles under the Central Excise Act, 1944.
2. Whether the process of packing, repacking, and relabeling of the battery-operated bikes amounts to manufacturing as per the Central Excise Act.
3. Whether the main appellant is required to deposit a specific amount pending further proceedings.

Issue 1: Battery-operated bikes classification:
The main appellant argued that the battery-operated two-wheelers they manufacture are not automobiles as per the provisions of the Central Excise Act, 1944. They contended that since the battery-operated bikes do not have an engine, they should not be considered automobiles. However, the Revenue argued that the battery-operated bikes fall under the definition of automobiles based on certain circulars and case laws. The Tribunal noted that while the term "automobile" is not defined in the Central Excise Act, the Automobile Cess Rules under the Industries Act provide a definition that includes motor cars, buses, trucks, scooters, and motorcycles. Considering this definition and the nature of battery-operated bikes as self-propelled vehicles for transportation, the Tribunal concluded that the battery-operated bikes are indeed a category of automobiles.

Issue 2: Manufacturing process and classification:
The main appellant carried out processes like packing, repacking, and relabeling of the battery-operated bikes at their premises. The Revenue argued that these activities amount to manufacturing as per the Central Excise Act, specifically under Section 2(f)(iii). This section includes processes like packing, repacking, labeling, or altering retail sale prices, which are considered manufacturing activities. The Tribunal considered the arguments from both sides and analyzed the relevant provisions. They concluded that the activities carried out by the main appellant do fall under the definition of manufacturing as per the Third Schedule of the Central Excise Act, 1944.

Issue 3: Deposit requirement pending proceedings:
After hearing both parties and reviewing the case records, the Tribunal directed the main appellant to deposit a specific amount within a set period. The deposit was ordered to be made to the Deputy Registrar for verification, with further orders to be given based on compliance. The Tribunal required the main appellant to deposit Rs. 30,00,000 within eight weeks and report back for further instructions. Upon payment of this amount, the Tribunal granted a stay on the recoveries of the remaining dues and penalties until the appeals were disposed of. This decision was pronounced in court on 30.09.2013.

In conclusion, the Appellate Tribunal CESTAT Ahmedabad addressed various issues related to the classification of battery-operated bikes as automobiles under the Central Excise Act, 1944, the manufacturing processes involved, and the deposit requirements pending further proceedings. The Tribunal's detailed analysis considered legal definitions, circulars, and case laws to reach a decision that impacted the main appellant's manufacturing activities and financial obligations during the legal proceedings.

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