ORDER
S.L. Peeran, Member (J)
1. For the purpose of hearing the appeal, the appellants are required to pre-deposit duty amount of Rs. 3,06,81,239/- and like sum as penalty and a personal penalty of Rs. 5,00,000/-. The appellant is a Small Scale Industry and are engaged in the manufacture of Solar powered Electric Power Fence System. The items which go into the manufacture of this item are Energizer, Neon Tester, Tool Kit, Battery Charger which are all duty paid. The electric fence comes into existence on its erection on the earth as fencing. The electric power is used to ward off the animals, and unwanted elements entering into the property. The appellant’s contention is that the item comes into existence only after erection on the earth or on the parapet wall where it is mounted and fixed. They contend that it is not a movable property in the light of the Apex Court judgment rendered in the case of Triveni Engineering & Industries Ltd v. CCE – 2000 (120) E.L.T. 273 (S.C.), HSN Notes and Board Circulars and several other judgments of the Tribunal. They also pleaded that being a small scale unit, they have made a marginal profit of Rs. 8 lakhs and are not in a position to pre-deposit such a huge demand. They have also submitted that there was no intention to evade payment of duty in the matter. As they held bona fide belief in the light of the Supreme Court judgment and Board Circulars that such an activity did not bring into existence the goods, therefore, the demands are barred by time. They also contest the levy of penalty.
2. The learned JCDR was requested to call for comments from the Commissioner and file their objections in the matter. The same has been filed today. The Commissioner has reiterated the findings recorded in the order. It is the finding of the Commissioner that the appellants are marketing the item as a movable fence and, therefore, from their own admissions, the item is required to be considered as a movable and dutiable product. As they had not filed declarations and had not taken out licence, therefore, the larger period was invocable.
3. We have carefully considered the submissions and have gone through the Supreme Court rulings laying down the criteria to consider an item as a dutiable one in the case of movable and immovable property. We have perused the photographs and find that the fence are totally fixed to the walls in some cases and in other cases it is fixed on strong poles which are embedded in the earth. All the items, which are used for generating electricity like energizer etc., are already duty paid. The department proceeds to consider the fence as a movable property and have confirmed the demands on the fence. In the light of the Board’s Circular and Supreme Court judgments, prima facie, we are of the considered opinion that the barbed fence, which is electrified can be considered as an immovable property as in some cases, the fence is embedded to the earth and in other cases, it is part of the walls. In view of the bona fide belief held by them with regard to the nature of the product manufactured and marketed, there is a ground available for the appellants to plead time bar. In the overall facts and circumstances including the plea of financial hardship, we are satisfied that the appellants have made out a case for grant of waiver of pre-deposit and staying the recovery of the amounts. The stay application is allowed. As the amounts are huge, the appeal is required to be heard out of turn. Appeal to come up for hearing on 22nd March, 2005.