Customs, Excise and Gold Tribunal - Delhi
Shri Vikash Josh, M/S. Navyug Weld Wires ... vs Cce, Indore on 29 March, 2001
ORDER
G.R.Sharma
1. Since these 3 appeals arise out of the same order, therefore they were heard together and are being disposed of for the purpose of pre-deposit by this common order.
2. Arguing the case for waiver of pre-deposit of duty and penalty, Shri A.Upadhayay, ld. Advocate submits that the applicants are the manufacturers of wires drawn from wire rods and thicker wires. He submits that in the mean time the applicants were also undertaking trading activities for these items. He submits that since the trading activity was not a part of manufacturing process, therefore they were not maintaining any statutory records in regard to the items for trading activity. He submits that the applicants have incurred huge losses which are evident from the balance sheet. He submits that the applicants are not in a position to pay even the loans taken from the financial institution and that this factory has been taken over by the Madhya Pradesh Financial Corporation . He submits that any order directing pre-deposit of nay amount will create irreparable loss to the applicants. He, therefore submits that looking to the financial condition as also to the fact that the trading activity was not covered by the Central Excise Rules, therefore, the entire issue, if examined, in depth will prove that no liability arises. He submits that there are a number of decisions of this Tribunal which show that drawing wires from wire rods or producing wires of a lower gauge from thicker wire does not amount to manufacture. He, therefore prays that pre-deposit of duty and penalty may be waived.
3. Shri Mewa Singh, ld. SDR opposes the request and submits that the applicants had not intimated to the department that they were undertaking trading activities in the same goods which they were manufacturing. He submits that on perusal of the documents resumed from the premises of the applicants as also from the Sale-Tax Check Post clearly indicate that they were getting raw materials for industrial purpose and that all the goods dealt with by them as trading activities were actually manufactured by them. He submits that insofar as the question of manufacture is concerned,m this point was never raised by the applicants before the lower authorities. He, therefore prays that the applicants may be directed to deposit the entire amount of duty and penalty in view of the fact that the two directors who have been penalised admitted in their submission that they were undertaking the activities of manufacture of in respect of the items stated to be dealt with in the trading activity.
4. We have heard the rival submissions. We note that in the instant case the issue is whether it was trading activity or not needs detailed examination which cannot be done at this stage. We also note that the point of treating the activity as manufacture was not raised before the authorities below. We also note that the two directors of the company on whom the penalty has been imposed admitted in their submission to some extent that they were undertaking manufacturing activities in respect of the items which they were selling and purchasing as trading activity. Looking to all the facts and circumstances of the case as also the financial condition, we direct the applicants as under:-
(1) M/s. Navyug Weld Wires (P) Limited shall deposit a sum of Rs.5 lakhs, (2) Shri Vikash Joshi shall deposit a sum of Rs.50,000/- and (3) Shri Manoj Dubey shall deposit a sum of Rs.50,000/-.
5. The above amounts should be deposited on or before 1.6.2001. On deposit of the above amounts, deposit of the balance amount of duty and penalty shall be dispensed with and recovery thereof shall remain stayed during the pendency of the appeals.
6. Failure to comply with the above orders shall lead to vacation of stay and dismissal of the appeals without any further notice.
7. The matter should come up for reporting compliance on 11.6.2001.