1999 (9) TMI 424 - AT - Central Excise

Summary

Issues:
1. Pre-deposit of duty amount, penalty, and mandatory penalty under Section 11AC & Rule 193Q.
2. Invocation of larger period under the proviso to Section 11A of Central Excise Act for Heating Elements.
3. Appellants' appeal for waiver of pre-deposit and violation of principles of natural justice.
4. Consideration of Board's Circular on exemption for intermediate goods.
5. Financial hardship faced by Small Scale Industry appellants.
6. Justification of recovery of duty on heating elements and marketability of repaired parts.
7. Violation of principles of natural justice in passing the Interim Order without hearing the appellants.

Analysis:
1. The appellants were required to pre-deposit duty amount, penalty, and mandatory penalty for Heating Elements as per the Order-in-Original passed by Assistant Commissioner. The demands were raised invoking a larger period under the Central Excise Act, and the Commissioner (Appeals) directed the pre-deposit of entire amounts, leading to the appeal.

2. The issue revolved around the exemption of Heating Elements under Notification No. 160/86 and the invocation of a larger period due to alleged suppression. The appellants argued that the product was not marketable and did not satisfy statutory regulations, seeking waiver of pre-deposit based on the Board's Circular and time bar considerations.

3. The appellants contended that the Interim Order directing pre-deposit violated principles of natural justice as their pleas were not considered, and the matter was not disposed of after hearing. The Tribunal found merit in the appellants' arguments, especially regarding the time bar and exemption for intermediate goods, leading to the grant of waiver of pre-deposit.

4. The Tribunal considered the Board's Circular on exemption for intermediate goods and the bona fide belief of the appellants regarding the marketability of Heating Elements. It concluded that the appellants were entitled to waiver of pre-deposit, setting aside the impugned order and remanding the matter to the Commissioner (Appeals) for a reasoned decision without insisting on pre-deposit.

5. The financial hardship faced by the Small Scale Industry appellants was a significant factor in granting the waiver of pre-deposit, emphasizing the importance of considering the specific circumstances of the appellants in such cases.

6. The arguments put forth by the Departmental Representative regarding the marketability of repaired parts of heating elements and the justification for recovery of duty were considered but did not outweigh the appellants' contentions regarding exemption and time bar issues.

7. The violation of principles of natural justice in passing the Interim Order without hearing the appellants was a crucial aspect that led to the Tribunal's decision to remand the matter for a fresh consideration by the Commissioner (Appeals) with proper hearing and evaluation of all grounds raised by the appellants.