Pre-deposit waiver in classification dispute over vulcanised rubber goods granted on strong prima facie case and balance of convenience.

Pre-deposit of duty and penalties was waived pending appeal because the classification dispute over articles of vulcanised rubber showed a strong prima facie case for the applicants. The applicants claimed classification under Chapter Heading 4016.19, while the Revenue proposed headings 8414.92 and 8419.90. Applying Section Note 1(a) of Section XVI of the Central Excise Tariff and a cited Tribunal decision on unhardened vulcanised rubber goods, the Tribunal held that the balance of convenience favoured interim relief. The waiver operated for hearing of the appeal.

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Issues: Whether pre-deposit of the duty and penalties was to be waived pending appeal, in view of the prima facie classification dispute relating to articles of vulcanised rubber.

Analysis: The applicants claimed classification under Chapter Heading 4016.19, while the Revenue sought classification under headings 8414.92 and 8419.90. Relying on Section Note 1(a) of Section XVI of the Central Excise Tariff and the cited Tribunal decision on unhardened vulcanised rubber goods, the Tribunal found that the goods disclosed a strong prima facie case for the applicants. On that basis, the balance of convenience was held to favour grant of interim relief.

Conclusion: The pre-deposit of the whole duty and penalties was waived for hearing of the appeal.

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