Rakhoh Industries Pvt. Ltd. vs Commissioner of Central Excise, Pune-I

At the request of the Counsel, the petition is taken up for final disposal at the stage of admission. This appeal is directed against the order dated 17 December 2013 of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). By the impugned order dated 17 December, 2013 the petitioner was directed to pre-deposit 25% of the duty amount quantified at Rs. 5,36,83,121/- under the proviso to Section 35F of the Central Excise Act, 1944) for the purposes of entertaining the appeal on merits.

Although the appellant has raised several questions in its appeal for our consideration. According to us question (a) brings out the basic controversy and the same reads as under:-

(a) Whether in the facts and circumstances of the case, the Tribunal was right in directing the appellant to pre-deposit the 25% of the duty demanded and confirmed by the Order-in-Original dated 24 June 2013 passed by the respondent?

The appellant is manufacturing anchor rings and load spreading plates which are supplied to company setting up windmills. The goods were cleared without payment of excise duty on the assumption that the same were exempted by Notification No. 6/2006 : , dated 17 March 2006 or under Notification No. 12/12, dated 17 March, 2012. The relevant entry in question under which the exemption was claimed, read as under:

"Wing operated electricity generator (WOEG) its components and parts including rotor and wind turbine controller".

The appellant''s case is that anchor rings and load spreading plates are parts of wind operated electricity generator. Both the items are embedded in the foundation and provide the base and stability to the tower of wind operated electricity generator and therefore, they are parts of wind operated electricity generator. On the other hand revenue''s case is that these items are not part of wind operated electricity generator and therefore, not covered by the above entry in the exemption Notification. Thus, they are chargeable to excise duty.

Mr. Prakash Shah, learned Counsel on behalf of the appellant submits that in the present case the Tribunal ought to have granted complete waiver of pre-deposit of duty for the purposes of hearing the appellant on merits. This is so as, according to him, the issues stand covered in the appellant''s favour by the decisions of the Tribunal in Pushpam Forging v. CCE - 2006 (193) E.L.T. 334 , Gemini Instratech Pvt. Ltd. v. CCE, 2013 TIOL 738: 2014 (300) E.L.T. 446 (Tri. - Mum.) and Bharat Heavy Electricals Ltd. v. Collector of Customs, 1999 (108) E.L.T. 448 . According to him the Tribunal has extended the benefit of similar/identical Notification to certain items like flanges, windmill doors as parts of wind operated electricity generator.

Mr. Kantharia, learned Counsel for the respondent submits that it is the case of the revenue that what is exempted is not windmill system in its entirety but only wind operated electricity generator and its components and parts including rotor and wind turbine controller. It is the case of the revenue that goods manufactured and cleared by the assessee are the parts being used in foundation base of Tower of windmill system and not being used as parts of Wind Operated Electricity Generator, Rotor and Wind Turbine Controller. Therefore, the appellant is not entitled to exemption under the said notifications.

The Tribunal has given a finding that none of the decisions of the Tribunal relied upon by the appellant are strictly on the point involved in the present case. The Tribunal enquired about the financial hardship of the appellant and the learned Counsel for the appellant stated that there was no financial hardship though the appellant is a proprietorship firm. The Tribunal then passed the impugned order observing that the applicant has not been able to make out a case for total waiver of duty and directed the appellant to deposit 25% of the duty amount i.e. Rs. 5,36,83,121/- and granted a stay on the payment of balance amount duty and penalty. Being aggrieved the appellant has preferred this appeal.

Having heard the learned Counsel for the appellant and the learned Counsel for the respondent-revenue, we are of the view 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. It must be borne in mind that the issues are being considered in the context of the impugned order directing a pre-deposit of 25% to hear the appeal on merits.

In view of the above, we are of the view that this is not a fit case for interference with the impugned order of the Tribunal. However, having considered all the relevant aspects while dismissing the appeal against the impugned order of pre-deposit we extend the time to pre-deposit. We grant the appellant 6 weeks time from today to deposit 10% of the duty amount and further 6-weeks time to deposit remaining 15% of the duty amount. Having regard to the nature of the controversy and the fact that it is of recurring nature we are of the view that this is a fit case for expeditious hearing of the appeal. The Tribunal shall make an endeavor to hear and decide the appeal within 3-months from the date the appellant makes pre-deposit of aggregate 25% of the total duty amount. Accordingly, the appeal is disposed of in the above terms with no order as to costs.