Customs, Excise and Gold Tribunal - Delhi
Delhi Tourism And Transportation Dev. ... vs C.C.E. on 5 October, 1994
Equivalent citations: 1994(74)ELT658(TRI-DEL)
ORDER
Harish Chander, President
1. The appellants have filed the 1994 above captioned appeals as well as stay applications being aggrieved from a common order passed by the Collector of Central Excise, New Delhi. Shri Joseph Vellapally, learned Senior Advocate with Shri Naveen Kumar, Advocate, has appeared. Ld. Senior Advocate pleaded that Beams and Girders are constructed partly and further casting is done at site. He pleaded that the goods are not marketable and no duty is leviable. In support he cited the latest decision of the Supreme Court in the case of The Indian Cable Company Ltd. v. Collector of C. Excise reported in 1994 (74) E.L.T. 22 (SC) - JT 1994 (6) SC 243 and laid special emphasis on para 11 of the said judgment, wherein the Supreme Court has referred to the earlier decision in the case of Union of India v. Delhi Cloth & General Mills, AIR 1963 SC 791 and also referred to the other decisions on the subject, namely, South Bihar Sugar Mills v. Union of India, AIR 1968 SC 928 and Ujagar Prints and Ors. v. Union of India reported in JT 1989 (1) SC 157 and Hindustan Polymers v. Collector, JT 1989 (3) SC 674 and other decisions. He pleaded that there is no case of mens rea and there is no wilful neglect or omission on the part of the appellants. The appellants' bona fide should not be doubted. He pleaded that in case the appellants are desired to deposit the penalty of Rs. 2 Lakhs it will amount to undue hardship.
2. Shri V. Sridharan, Learned Advocate who had appeared on behalf of M/s. U.P. State Bridge Corporation Ltd. pleaded that the goods are not marketable and also referred to the same judgments which had been cited by the Ld. Senior Advocate Shri Vellapally and also stated that the appellants have got a good case on limitation. He pleaded that the Director General, Anti-Evasion had investigated at length and had come to the conclusion that these are not excisable but fairly stated that there is no written communication to this effect. Thereafter, suddenly the appellants were saddled with the show cause notice. He stated that the period involved is July 1990 to 4-6-1993 and the show cause notice was issued on 19-7-1993 and without prejudice to the appellants' belief that the goods are not excisable and not marketable, the appellants' submission is that at the most demand can be restricted to 6 months. He pleaded that in case the appellants are desired to deposit Rs. 55,49,852 towards duty and penalty of Rs. 10 lakhs it will amount to undue hardship. He also referred to the Balance Sheet for the year ending 31st March, 1993 and stated that-there are losses to the tune of 319 Lakhs for the year 1992-93.
3. Shri R.K. Kapoor Ld. SDR has appeared on behalf of the Respondents. He relied on the order passed by the Collector. He argued that prima facie the Revenue has a good case on merit and also argued that the goods are marketable and extended period of limitation is invokable. In support of his argument, he cited the case Safari Industries (I) Private Ltd. v. Collector of Central Excise reported in 1991 (54) E.L.T. 308 (Tri.), Hyderabad Asbestos Cement Products Ltd. v. Union of India reported in 1980 (6) E.L.T. 735 (Del). He pleaded for the rejection of the stay applications.
4. Heard both sides. Shri Vellapally, Ld. Senior Advocate has cited a decision in the case of Indian Cable Company Ltd. reported in JT 1994 (6) SC 243. Paras 11 and 12 from the .said judgment are reproduced below:
"11. After adverting to the aforesaid definition of 'excisable goods' and the meaning of the word "goods", a Constitution Bench of the Supreme Court in Union of India v. Delhi Cloth and General Mills AIR 1963 SC 791, at p. 795, stated in paragraph 17 thus :
"These definitions make it clear that to become 'goods' an article must be something which can ordinarily come to the market to be bought and sold".
12. In a series of decisions, this Court has held that "marketability" is an essential ingredient, to hold that an article is dutiable or exigible to duty of excise. The important decisions of this Court which have laid down the law on this aspect, are the following :
(1) Union of India v. Delhi Cloth and General Mills Co. Ltd. - AIR 1963 SC 791.
(2) South Bihar Sugar Mills v. Union of India - AIR 1968 SC 928 : 1968 (3) SCR 21.
(3) Bhor Industries v. Collector -1989 (1) SCC 602.
(4) Hindustan Polymers v. Collector -1989 (43) E.L.T. 165 (SC) (5) Collector of Central Excise v. Ambalal Sarabhai - JT 1989 (3) SC 341.
(6) Union Carbide v. Union of India -1988 (SC) JT 453 (7) A.P. Electricity Board v. Collector of Central Excise - JT 1994 (1) SC 545.
Shri. V. Sridharan, Advocate had argued on the point of limitation and had cited a decision reported in 1994 (73) E.L.T 257 (S.C.). Para 6 of the said judgment is reproduced below : -
"6. Let us clear the ground. In the Collector of Central Excise v. Chemphar Drugs and Liniments, 1989 (40) E.L.T. 276 (SC), this Court has held that in order to make a demand for excise duty sustainable beyond a period of six months and upto a period of five years, under Section 11A of the Central Excises and Salt Act (earlier, Rule 10 of the Rules made under the said Act), It had to be established that excise duty had not been short-levied or paid by reason of fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or the Rules with intent to evade payment. Something more positive than mere inaction or failure on the part of the assessee or consious or deliberate withholding of information when the assessee knew otherwise was required before the assessee could be saddled with any liability beyond the period of six months. Very fairly, Mr. M. Chandrasekharan, learned Additional Solicitor General, appealing for the excise authorities, did not contend that the appellants had been guilty of any fraud or collusion or wilful misstatement or suppression of facts with intent to evade the payment of excise duty. The demand for payment of excise duty for the period 19th June, 1980 to 31st January, 1981, in the sum of Rs. 84,836.35 upon 1,93,056 liters made on 6th August, 1981 must, therefore, fall."
We have duly considered the decision in Hyderabad Asbestos Cement Products Ltd. cited by the Ld. SDR. During the course of arguments we found that the product in dispute was found classifiable under Heading 68.07. We have duly looked into the prima facie merits of the case and the financial hardship.
5. Keeping in view the above discussion and the various decisions cited by the parties, we are of the view that if the appellants are desired to pre-deposit fully it will amount to hardship. We dispense with the pre-deposit of penalty amount in the case of Delhi Tourism & Transportation Development Corporation and further order that during the pendency of the appeal the Revenue authorities shall not pursue any recovery proceedings. Now, coming to the prayer for stay in the case of U.P. State Bridge Corporation Ltd. we dispense with the pre-depbsit of the duty amount and penalty on the condition of the applicants depositing Rs. 5 lakhs in cash and furnishing a bank guarantee for Rs. 5 lakhs within four months from today. The appellants have to report compliance of the order within five months from today. In case the appellants fail to comply with the terms of the stay order, the stay order shall stand automatically vacated. It is further ordered that during the pendency of the appeal the revenue authorities shall not pursue any recovery proceedings of the penalty amount... . The matters are listed for mention on 7-2-1995.