2008 (4) TMI 591 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit and stay of recovery of duty, interest, and penalty imposed on BHEL for clearances of parts of a boiler during 2002-03 and 2003-04.

Analysis:
The case involved an application by BHEL for waiver of pre-deposit and stay of recovery of a significant amount of duty, interest, and penalty imposed on the appellant for clearances of parts of a boiler during the years 2002-03 and 2003-04. The appellant had entered into a contract for the supply of a generator and was to supply the boiler as part of the contract. The issue arose from the method of duty payment adopted by the appellant, where duty was paid on individual clearances on weight provisionally, without including the value of engineering drawings in the assessable value per kilo. Allegations of suppression of facts and evasion were made against BHEL, leading to the demand for a substantial amount from the appellant.

The appellant argued that the proceedings were premature as the clearance of the boiler was not completed, and assessments were yet to be finalized. It was highlighted that BHEL had paid service tax on the value of engineering drawings as an Engineering Consultant and was registered with the department for this purpose, refuting the allegation of suppression. The appellant sought the setting aside of duty demand and penalty.

Upon considering the submissions and case records, it was observed that the assessment of the clearances in question was provisional, with only parts of the boiler being cleared at the commencement of the proceedings. The assessment of the complete boiler for supply could not be finalized in instalments, and any short levy could be determined and demanded after the clearance of the full boiler as per the contract. The Tribunal found the orders of the lower authorities premature and liable to be quashed. Consequently, the orders were set aside, and the appeal filed by BHEL was allowed.

In the operative part of the order pronounced in open court on 25-4-2008, the Tribunal granted relief to BHEL by setting aside the orders of the lower authorities, emphasizing the provisional nature of the assessment and the premature actions taken against the appellant.