Customs, Excise and Gold Tribunal - Delhi
Jay Pee Bela Cement vs Commissioner Of Central Excise on 16 August, 1999
Equivalent citations: 2000ECR335(TRI.-DELHI), 2000(118)ELT193(TRI-DEL)
ORDER
P.C. Jain, Vice President
1. By the impugned order, the Commissioner (A) has rejected the appeal of the applicants herein for not pre-depositing the amount of duty of Rs. 23,22,324/- as directed by him vide his interim stay order, dated 24-5-1999. Ld. Advocate Shri G. Shiv Das submits that the interim order has been passed without giving an opportunity for personal hearing. Even if it is admitted that personal hearing is not required to be given in view of Supreme Courts judgment in the case of U.O.I, v. Jesus Sales Corpn. [ 1996 (83) E.L.T. 486]. Even so the said authority was required to pass an interim stay order after taking into account all the pleas of the appellant even for arriving at a prima facie view. That has not been done by the lower appellate authority. The impugned order, therefore, he submits, is bad in law and deserves to be set aside on this ground alone.
2. Coming to the merits, ld. Advocate submits that the appellants herein are manufacturing cement concrete blocks using duty paid inputs. They were availing the benefit of Notification 36/94, dated 1-3-1994 which gives exemption from payment of duty on these blocks provided they are manufactured and utilised captively at site. He submits that benefit of this notification has been denied by the adjudicating authority on the ground that the site is not where the goods are used but it is somewhat away from the site of use of the concrete blocks. Therefore, it is not the manufacture at site and hence the benefit of Notification 36/94-C.E. has been denied. This view of the adjudicating authority, submits the ld. Advocate is contrary to the Tribunal's judgment vide Final order Nos. 380 & 381/97-D, dated 8-5-1997 in the cases of M/s. Pmtimba Industries and Shri Vinay B. Kulkarni v. C.C.E., Bombay. He also points out that the CBEC has also given a clarification in the context of a similar notification issued subsequently, namely, Notification No. 5/98-C.E., dated 2-6-1998 wherein it has been stated that the expression 'site' may not be given a restrictive meaning and shall include any premises made available to the manufacturer of goods falling under Heading No. 68.07 of the Schedule to the Central Excise Tariff Act, 1985 by way of a specific mention in the contract/agreement for such construction work, provided that the goods manufactured at such premises are solely used in the said construction work only. Ld. Advocate therefore, submits that the applicants have a strong prima facie case insofar as demand of duty is concerned. Consequently, he submits that there is no warrant for imposing any penalty, as has been done by the adjudicating authority by imposing an amount of Rs. 7,79,931/-.
3. Opposing the contentions, ld. JDR Shri Ravinder Babu reiterates the findings of the adjudicating authority insofar as the merits of the prima facie case is concerned. He further submits that the lower appellant's authority has not given its judgment on the basis of merits of issue involved but has only dismissed appeal for not making a pre-deposit as required under Section 35F. Since the pre-deposit has not been done, the lower appellate authority was competent to dismiss the appeal for non-compliance with the stay order dated 24-5-1999.
4. We have carefully considered the pleas advanced from both sides. We agree with the submission of ld. Advocate that the interim stay order dated 24-5-1999 does not at all discuss any pleas taken by the applicants in their stay application. It is a superficial order giving the finding that the said authority does not find a prima facie case. This is no manner of dealing with a stay application. Even if the opportunity for personal hearing is not granted, the authority below is required to give a speaking order on all the pleas taken by an assessee in his stay application. Otherwise there is a clear case of violation of principles of natural justice. Apart from that, we also observe that the applicants have a strong prima facie case on merits inasmuch as the CBEC circular is there for determining the scope of expression 'site' in Notification 36/94-C.E. We also find, prima facie, sufficient force in the applicant's plea that if the duty is ultimately charged from the applicants under Notification 36/94, they would be entitled to the benefit of Modvat credit of duty paid on inputs. We observe that the adjudicating authority has considered this plea. Consequently, we allow the stay petition unconditionally. Since the lower appellate authority has not decided the case on merits, we are remanding the matter to the said authority for re-adjudication on the merits of the issues involved herein, after we set aside the impugned order. No pre-deposit is required to be made before the appeal by the lower appellate authority is heard.