Ashbee Systems Pvt. Ltd. vs Commissioner of Central Excise and Another

By the impugned order dated 6th December, 2010, The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has partly dismissed the Petitioner''s application for stay of the order dated 8th September, 2009 passed by the Commissioner, Delhi. The Petitioner has been denied stay of demand of excise duty of Rs. 1,71,40,806/-. CESTAT has granted waiver of the interest thereon and the penalty, including personal penalty of Rs. 4,00,000/- on a Director of the Petitioner.

It is stated that the Petitioner is a small-scale unit engaged in business of procurement, erection and commissioning of pit and pitless type of Electronic Weigh Bridge since the year 1984. The contention of the Petitioner is that the said activities do not amount to manufacture and, therefore, the activity is not taxable under the Central Excise Act, 1944 (Act, for short). The stand of the Respondent, on the other hand, is that the aforesaid activities amount to manufacture.

CESTAT in the impugned order has referred to the judgments of the Supreme Court in Sirpur Paper Mills Ltd. Vs. Collector of Central Excise, Hyderabad, and M/s. Narne Tulaman Manufacturers Pvt. Ltd., Hyderabad Vs. Collector of Central Excise, Hyderabad, . It has held that the Petitioner has not been able to establish a prima facie case and, therefore, the entire tax amount of Rs. 1,71,40,806/- has been directed to be deposited.

During the course of the hearing, learned Counsel for the Respondent has also relied upon the judgment of the Supreme Court in Commissioner of Central Excise, Ahmedabad Vs. Solid and Correct Engineering Works and Others, in support of the order and the reasoning given by the CESTAT.

On the other hand, the contention of the Petitioner is that in their own cases, it has been repeatedly held that the Petitioner is not liable to pay excise duty on the activity, which as per the Petitioner amounts to fabrication and commissioning and not manufacture. The Petitioner along with the writ petition has filed copy of these orders passed by the Respondent themselves. The Petitioner has also relied upon the following decisions in support of their contention:

(i) Hindustan Zinc Ltd. v. CCE 2005 (181) (S.C.)170

(ii) T.T.G. Industries Ltd., Madras Vs. Collector of Central Excise, Raipur,

(iii) Shapoorji Pallonji and Co. and K.B. Captain Vs. Union of India (UOI), The Collector of Central Excise and Customs, The Additional Collector of Central Excise and Customs and The Superintendent of Central Excise,

(iv) CCE v. Man Structurals Ltd. 2001(130) ELT 401 (S.C.)

Reference is made to the order of the Supreme Court in Auto Measurematic Ltd. v. Asstt. Collector of Customs, Excise, Madras 1997(96) ELT 14 (SC). In the said case while directing the Assessee to approach the Tribunal, it was held that pre deposit would not be insisted. The Petitioner has also relied upon the Board Circular No. 58/1/2002-CX dated 15th January, 2002. Contention on the question of limitation has also been raised and reference is made to the decisions in

(i) Nizam Sugar Factor v. CCE 2006(197) ELT 465(S.C.)

(ii) CCE v. Chennai Petroleum Corp. Ltd. 2007(211) ELT 193(S.C.)

It is noticed that the impugned order passed by the CESTAT does not notice and take into consideration the contentions raised by the Petitioner including the judgments relied upon by them. The grounds and reasons given by the Petitioner including case law relied upon by them have not been referred to in the impugned order. Keeping in view the aforesaid facts, we are inclined to quash the impugned order and ask the CESTAT to decide the application for stay afresh. The learned Tribunal will keep in mind the contentions and reasons including the case law relied upon by the Petitioner. It is clarified that this Court has not expressed any opinion on merits of the controversy and issue. CESTAT will independently apply its mind.

With the aforesaid observations, the writ petition is disposed of.