Marble Art vs Union of India (UOI)

The facts: The M/s. Marble Art (the Assessee) imports the marble blocks. They are cut into marble slabs and after polishing sold in the market.

A notice was given to it by the Excise Department (the Department) under the Excise Act, 1944 (the Act) for the period from November, 2005 to January, 2006 for payment of excise duty treating the Assessee as a "manufacturer".

The Appellant filed its objections. However, the adjudicating officer decided the same against him on 31-3-2007. The Assessee filed an appeal before the Commissioner (Appeals). It was consolidated with the appeal of one Oriental Trimex Limited. Both the appeals were dismissed on 14-12-2007.

The Assessee filed second appeal before Customs, Excise & Service Tax Appellate Tribunal (the Tribunal). In this appeal, an application for waiver of condition of pre-deposit was also filed. This application was rejected by the Tribunal by its order dated 5-6-2008 and the Assessee was required to deposit the amount, hence the present appeal.

Substantial Question

We have heard Shri Priyadarshi Manish, counsel for the Appellant and Shri. Shambhu Chopra, counsel for the Department in this appeal, the following substantial question of law is involved.

Whether the application for waiver of pre-deposit could be rejected without considering the prima facie case.

The Decision

The counsel for the Appellant submitted that:

� In view of the Aman Marble Industries Pvt. Ltd. Vs. Collector of C. Ex., (the Aman case), the cutting and polishing of the marble slabs did not amount manufacture and no excise duty was leviable;

� It became manufacturing activity after note 6 was inserted in Chapter 25 of the Central Excise Tarrif Act w.e.f. 1-3-2006;

� The appeal of the Oriental Trimex Limited was dismissed along with the appeal of the Assessee by the Commissioner (Appeals). It was allowed by the Tribunal by its judgment reported in 2010 (249) E.L.T. 259 (Tri. & Del.), Oriental Trimex Ltd. v. Commissioner of Central Excise, Noida (the Trimex case); and

� The Tribunal committed an illegality in dismissing the waiver application without considering the prima facie case.

A Division Bench of our Court in ITC Limited Vs. CC (Appeals) and CE and Others, after noticing the various decisions of the Supreme Court has held that:

� The Court should consider ''undue hardship'' which may be caused by dismissing the stay application.

� The phrase ''undue hardship'' would cover a case where the Appellant''s case has a strong prima facie case.

� The phrase also covers connotation where there is arguable case in the appeal.

� If the appellate authority forms the opinion that the Appellant has strong prima facie case, it should dispense with the pre-deposit condition all together.

In the case on hand, we are of the opinion that the strong prima facie case in favour of the Assessee has been made out in view of the Aman and the Trimex case.

We have perused the impugned order. There is no denial of the fact that the prima facie case has not been considered by the Tribunal while deciding the application for waiver of the Appellant. In view of this, the appeal is liable to be allowed.

The correct procedure for us is to send the matter back to the Tribunal for considering the waiver application in accordance with law. But, considering the fact that the appeal which was dismissed by the Commissioner (Appeals) along with the appeal of the Assessee has been allowed by the Tribunal, it would be appropriate that the Assessee may be required to furnish the bank guarantee of the impugned amount in the appeal. This may be done before 1st April, 2011. In case, the Appellant furnishes the bank guarantee of the impugned amount, then the appeal may be heard and decided on merits in accordance with law.

In view of the above, the present appeal is allowed. The judgment and order dismissing the waiver application, passed by the Tribunal is, hereby, set aside.