1994(07)LCX0064

 IN THE CEGAT, NORTH REGIONAL BENCH, NEW DELHI

Ms. Jyoti Balasundaram, Member (J) and Shri Shiben K. Dhar, Member (T)

HARYANA STATE ELECTRICITY BOARD

Versus

COLLECTOR OF C. EX., NEW DELHI

Stay Order No. S/358/94-NRB, dated 25-7-1994 in E/Stay 397/94-NRB  and E/Appeal No. 689/94-NRB

CASE CITED

Trib. Order No. E/275/93-B1 dated 24-9-1993.                                                                                       [Para 1]

Advocated By : Mrs. Archana Wadhwa, Advocate, for the Applicants.

Shri K.N. Gupta, SDR, for the Respondents.

[Order per : Jyoti Balasundaram, Member (J)]. - Smt. Archana Wadhwa, learned Counsel appearing for the applicants in the above application for waiver of pre-deposit of duty of Rs. 33,25,554.09 P and penalty of Rs. 2 lakhs demanded and imposed by the Collector of Central Excise, Delhi submits that the duty has been demanded on inputs cleared as such and not utilised in the manufacture of end-products, copper coils. She submits that the final product has been held to be non-excisable by the order of the Tribunal No. E-275/93-B1 dated 24-9-1993 in which it has been held that fabrication of coils does not amount to manufacture. Therefore, the learned Counsel submitted that the Modvat Scheme itself is not applicable to the applicants and the amount has been wrongly confirmed in terms of Rule 57-F(1) which is not a rule attracted in the facts of this case.

2. In addition to the plea on merits, financial hardship is also pleaded with  reference  to  their  balance  sheet  for  the  year  1992-93  in  which  the applicants company has suffered an accumulated losses of Rs. 1,538.87 crores. In the circumstances, she prays for waiver of pre-deposit of duty and penalty.

3. The learned DR Shri K.N. Gupta, submits that once the applicants’ company has submitted to the coverage to the Scheme, they would be covered and Rule 57-I is attracted to the facts of this case and hence the inputs removed as such are dutiable. He draws our attention to the finding of the Adjudicating authority holding that the contention that the end-product itself has been held to be not liable to duty and therefore, provisions of Rule 57-I of Modvat is not applicable is correct.

4. Regarding financial position, he submits that though  it is true that the applicants company like other State Electricity Boards has suffered losses, but this by itself should not be a ground for waiver.

5. On hearing both the sides and carefully considering their submissions, we are of the view that the applicants have to made out a prima facie case for waiver on merits. Prima facie that the delcared inputs having ultimately been held not to be liable to duty by the Tribunal would not interfere with the applicability of the provisions of the Modvat rules in force at the material time. We therefore, reject the application for waiver and direct the applicants to deposit the duty amount within a period of 8 weeks from to-day and on such deposit being made, the pre-deposit of penalty shall stand waived and its recovery stayed till the disposal of the appeal. Non-compliance of this order will result in automatic vacation of the stay and dismissal of the appeal. Matter to come up for compliance on 21st September 1994. The applicants prayer for payment of this amount by debit in RG 23 Part II is acceded. The amount may be paid either by debit or by PLA or by cash.

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Equivalent 1994 (73) ELT 588 (Tribunal)