Judgment:
1. Through the present stay applications, the appellants, M/s Nutech Packagings, has sought waiver of the pre-deposit of duty amount of Rs. 21,22,913 and equal amount of penalty, while appellant S/Shri Jatinder Shroff and Mukul Maindiratta have sought waiver of the penalty amount of Rs. 2 lakhs each as imposed on them under Rule 209-A of the Act by the Commissioner through the impugned order-in-original under appeal.
2. The perusal of the impugned order shows that the appellants, M/s Nutech Packagings, are engaged in the manufacture of Boxes of duplex paper board and varnished printed paper sheets. During the course of transit checking, the Preventive Officers of the Central Excise intercepted their three wheeler loaded with 6984 sheets of unprinted and laminated duplex paper board. In a follow up, it also revealed that they were availing modvate credit on their inputs i.e. duplex paper board etc. under Rule 57-A of the Central Excise Rules. They were removing the modvat able inputs either as such or after some processing for job work under the covers of challans which were not in the prescribed proforma. Nor any duty was debited at the time of removing of the goods. The statement of Shri Rajveer Jain, Accountant of the Company was recorded who admitted the removal of the goods found in the vehicle without payment of duty. He also could not offer explanation for the unaccounted stock of the finished goods valued at Rs. 2,89,065.50 The details of the modvat able inputs removed without debiting the duty had been detailed at page 16 of the impugned order itself.
3. The learned Counsel has contended that the activity of lamination or varnishing of the printed paper carried out by the appellants could not be treated as activity of manufacture in view of the ratio of the law laid down by the Supreme Court in the case of Metagraphs Pvt. Ltd. v.CCE, Bombay Exemption Notification No. 66 to contend that the corrugatged paper or paperboard or converted types of paper or paperboard intended for the manufacture of the goods falling under sub-heading 4819.12 of this Schedule were exempted from duty. According to the learned Counsel, the impugned order of the Commissioner is, therefore, on the face of it is illegal and total waiver of the pre-deposit of the duty and penalty amount deserves to be allowed.
4. But the question, as to whether the activity carried out by the appellants could be treated as activity of the manufacture or not requires detailed examination of the facts and material on record by keeping in view the ratio of the law laid down by the Apex Court in the above referred case. In fact, no such plea was taken by the appellants at any stage. This plea has been taken before us for the first time.
The exemption under the General Exemption Notification No. 66 was also never claimed by them in their Classification List filed by them. At this stage, on definite findings can be recorded about the non-excisebllity of the goods manufactured by the appellants, as we are only dealing with the stay applications. The learned Commissioner has recorded detailed reasons in support of his order and we, at this stage, do not find sufficient ground to disagree with the same. There had been interception of the goods removed without payment of duty from the factory premises, by the appellants. The removal of the goods for job work purposes by the appellants had been also in violation of Rule 57F(4) of the Rules as is evident from the impugned order. Therefore, keeping in view the facts and circumstances of the case, in our view, no strong case for total waiver of the pre-deposit of the duty and penalty amount by the appellants is made out. We, therefore, direct the appellants, M/s. Nutech Packagings, to make pre-deposit of Rs. 5 lakhs (rupees five lakhs only) on or before 28.6.2002. On making this deposit, the requirement to pre-deposit the penalty amounts by the other two appellants and of the balance penalty and duty amount by the appellants, M/s. Nutech Packagings, shall stand waived and recovery stayed till the disposal of the appeals. However, it is made clear that if the terms of this stay order are not complied with within the stipulated period, then their appeals shall become liable to be dismissed under Section 35-F of the Act without any further reference to them.