CHITTARANJAN SATAPATHY,MEMBER (T) - (1.)Heard both sides. Before this appeal filed by the appellant Public Sector Unit could be taken up for detailed hearing, the appellants had to obtain clearance from the Committee on Disputes and they were also required to predeposit duty of Rs. 15,26,92,645/ -, penalty of Rs. 15,26,92,645/ - and also the interest under Section 11AB on the duty demanded as well as interest on Rs. 4,46,164/ - paid by the appellants belatedly as held by the adjudicating Commissioner.
(2.)INITIALLY , the appeal was dismissed as the same was filed without obtaining the required COD clearance. Subsequently, the appellants have obtained the clearance from the Committee on Disputes and therefore, the appeal has been restored. However, the appellants have not deposited the duty, penalty and interest which is a pre -requisite before the appeal itself can be heard by the Tribunal. The appellants have filed a stay petition for waiver of pre -deposit. We find that though Section 35F of the Central Excise Act, 1944, requires prior deposit of duty, penalty and interest before filing an appeal, almost every appellant before the Tribunal is routinely filing stay applications requesting for waiver of the amounts. In case of the present appellants, there is no financial difficulty in making the pre -deposit. This is confirmed by Shri Ravi Raghavan, ld. Counsel appearing for the appellants. Section 35F provides that where, in any particular case, the Tribunal is of opinion that the deposit of duty and penalty would cause undue hardship to the appellants, the Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the interests of revenue. It is expected that when the financial health of the appellant -Company is sound and the adjudicating Commissioner has passed a well -reasoned and speaking order after hearing the Representatives of the appellant - Company, the appellant -Company should make the pre -deposit of the amounts of duty etc. under Section 35F of the Central Excise Act, 1944 before their appeal can be heard on merit. We fail to understand why in almost every case of appeal before this Tribunal, the exceptional power of the Tribunal to waive the pre -deposit is being sought to be invoked in a routine manner. 2. When asked as to what undue hardship the appellant Public Sector Unit would face in making the deposit under Section 35F, the ld. Counsel gives no satisfactory answer. He merely states that the decision under appeal is not correct, the case is required to be decided in favour of the appellant -Company and that in some other Commissionrates, the duty demands on the same goods have been dropped. We have made it clear to the ld. Advocate that we can examine the detailed arguments put forth against the impugned order only when we take up the appeal for regular hearing. At this stage, we have to only consider whether the statutory requirement of pre -deposit is required to be waived on the ground of undue hardship. We have already noted that the appellant -Company has no financial hardship whatsoever. The ld. Counsel has shown us an order passed by the Commissioner of another jurisdiction, namely, Bangalore, which is in favour of the appellants. Only when we hear the matter in detail, we can come to the conclusion as to whether the present order passed by the jurisdictional Commissioner is correct or the other order passed by another Commissioner in another jurisdiction is correct. Initially, the ld. Counsel tried to make us believe that only in this case the jurisdictional Commissioner has passed a wrong order and in all other jurisdictions, the appellants have succeeded. In the course of hearing, such submission was not found to be correct as the COD clearance granted by the Committee on Disputes has permitted to pursue as many as 3 (three) appeals in respect of three different orders including the present order of the jurisdictional Commissioner on the same issue. On this being pointed out, the ld. Counsel admits that apart from the impugned order passed by the jurisdictional Commissioner, there are other orders passed in other Commissionerates which are against the appellants on the same issue. We also find that the High Powered Committee on Disputes after consulting both the Nodal Ministries has come to the conclusion that in these cases, the issue involves contentious legal disputes and hence it has given clearance to pursue the appeals before the Tribunal. As such, the issue cannot be stated to be straight forward and in favour of the appellants as claimed by the ld. Advocate.
(3.)IT is also not a case that the impugned order passed by the jurisdictional Commissioner is patently perverse. On the other hand, on prima facie consideration, we find that the order is well -reasoned, has considered the entire facts of the case and is based on sound reasoning as well as precedent decision of the Tribunal in another case.
We have also prima facie considered the merit of the case. The appellants receive non -duty paid Motor Spirit in their premises, they blend the same with MFA (Multi Functional Additive) to produce a new product. The adjudicating Commissioner has held that the new product is excisable as it has different characteristics and is marketed as a separate product and hence it meets the crucial test of manufacture. We note that the law is now settled that when product B is made from product A, for determining its excisability, it is not relevant whether products A and B are classified under the same tariff heading or under different tariff headings. Product B to be excisable must meet the test of manufacture and marketability. If Product B does not meet the test of manufacture and marketability, even if it falls under a separate tariff heading, it cannot be charged to excise duty. On the other hand, even if products A and B both fall under the same tariff heading, but product B meets the test of manufacture and marketability and is found to be a separate, distinct product with separate characteristics and known as such in the market, the same has to be held as excisable. In our prima facie view, we find that the jurisdictional Commissioner while passing the impugned order has correctly applied the test while holding the impugned goods Speed to be separate excisable goods.