2014 (3) TMI 381 - HC - Central Excise

Waiver of pre deposit - Whether in the facts and circumstances of the case, the Tribunal was right in directing the appellant to predeposit the 25% of the duty demanded and confirmed by the Order in Original dated 24 June 2013 passed by the respondent - Held that - that since none of the decisions relied upon by the appellant is directly on the items which are the subject matter of the present appeal, the same would have to be examined at the final hearing of the appeal. The notification granting benefit has also undergone changes from time to time. Moreover, prima facie the exemption is to one of the items of windmill system i.e. wind operated electricity generator and its components and parts and not an entire windmill system - However, time to make pre deposit is extended - Decided partly in favour of assessee.

Summary

Issues:
1) Whether the Tribunal was right in directing the appellant to predeposit 25% of the duty amount for entertaining the appeal on merits?

Analysis:
The appeal in question was against an order of the Customs Excise and Service Tax Appellate Tribunal (Tribunal) directing the petitioner to predeposit 25% of the duty amount under the proviso to Section 35F of the Central Excise Act, 1944. The appellant, a manufacturer of anchor rings and load spreading plates for windmills, claimed exemption from excise duty under specific notifications. The dispute arose as to whether these items were indeed parts of wind operated electricity generators, thus exempt from duty, or not. The appellant argued for a complete waiver of the predeposit, citing precedents where similar items were granted exemption. However, the revenue contended that the items in question were not part of wind operated electricity generators and were therefore chargeable to excise duty.

The Tribunal found that the decisions relied upon by the appellant were not directly applicable to the present case, and after considering the financial position of the appellant, directed the deposit of 25% of the duty amount. On appeal, the High Court observed that the issue required a detailed examination during the final hearing, as the exemption notification had undergone changes over time. The Court noted that the exemption applied to specific items of windmill systems, not the entire system. While upholding the Tribunal's order, the Court extended the time for predeposit, allowing the appellant to deposit 10% of the duty amount initially, followed by the remaining 15% within the specified timeframe. Emphasizing the importance of an expeditious hearing, the Court instructed the Tribunal to decide the appeal within three months of the appellant's predeposit.

In conclusion, the High Court upheld the Tribunal's order directing the predeposit of 25% of the duty amount but granted an extended timeline for payment. The Court stressed the need for a prompt resolution of the appeal due to the recurring nature of the controversy. The appeal was disposed of with no order as to costs.