Case Note & Summary
The appellant, MS Alumayer India Pvt. Ltd., is engaged in fabrication and erection of structural glazing. They purchase aluminum angles/profiles, glass, and other items on payment of excise duty. The aluminum sections are given on job work for cutting and/or anodizing, then cut into sizes and removed to sites for installation. A show cause notice was issued on 23 March 2009 by the Additional Commissioner of Central Excise alleging that the appellant manufactured curtain wall/structural glazing without payment of duty, classifying it under Heading 76.10 of the Central Excise Tariff Act 1985, and invoking extended period of limitation for suppression. The appellant contended that structural glazing, once erected, becomes immovable property and is not excisable. The Tribunal, while disposing of the waiver application, directed deposit of the entire duty amount of Rs.28,12,634/- as a condition for waiver of interest and penalty. The High Court admitted the appeal on the substantial question of law whether the Tribunal was right in holding that the appellant did not make out a prima facie case for total waiver. By consent, the appeal was taken up for final hearing. The Court noted that the appellant had a strong prima facie case because structural glazing, once erected, becomes embedded in the earth and is immovable property, not goods liable to excise duty. The Court also noted that the demand was time-barred as there was no suppression. Accordingly, the Court set aside the Tribunal's order and directed that the requirement of predeposit of duty, interest, and penalty be waived entirely, and the appeal before the Tribunal be heard on merits without any predeposit.
Headnote
A) Central Excise - Predeposit Waiver - Prima Facie Case - Section 35F Central Excise Act, 1944 - The issue was whether the Tribunal erred in directing deposit of entire duty amount of Rs.28,12,634/- as condition for waiver of interest and penalty, without considering that the appellant had a strong prima facie case on merits regarding classification of structural glazing as immovable property not liable to excise duty. Held that the appellant made out a prima facie case for total waiver of predeposit (Paras 1-6).
Issue of Consideration
Whether the Tribunal was right in holding that the Appellants did not make out a prima facie case for total waiver of predeposit under Section 35F of the Central Excise Act, 1944.
Final Decision
Appeal allowed. The order of the Tribunal dated 15 September 2011 is set aside. The requirement of predeposit of duty, interest, and penalty is waived entirely. The Tribunal shall hear the appeal on merits without insisting on any predeposit.
Law Points
- Prima facie case for waiver of predeposit
- Section 35F Central Excise Act
- 1944
- structural glazing as immovable property
- classification under Central Excise Tariff Act 1985
