2004 (1) TMI 429 - AT - Central Excise

Appellants Ordered to Pre-Deposit Rs. 20 Lakhs, Waiver & Stay Granted

The Tribunal directed the appellants to pre-deposit Rs. 20 lakhs within 12 weeks, with a waiver of pre-deposit and a stay of recovery on penalty and ... Stay/Dispensation of pre-deposit - Classification dispute Issues:Classification of product 'Selsun Blue' - Demand of duty - Penalty imposition - Pre-deposit amount determination.Classification Dispute Analysis:The case involved a dispute regarding the classification of a product named 'Selsun Blue,' a 1% Selenium Sulfide Shampoo manufactured by the appellants. The demand of duty amounted to approximately Rs. 63 lakhs for the period July 2000 to June 2001, with an additional penalty of around Rs. 6.3 lakhs imposed on the appellants. The Tribunal considered the records and noted that the ld. Commissioner (Appeals) had based their decision on a previous order concerning the same product's classification for an earlier period. The Tribunal acknowledged that the appellant's appeal against the earlier order was pending, and a pre-deposit of Rs. 3.5 lakhs had been directed by the Tribunal in that case. The Tribunal decided to follow the interim order issued by the Tribunal in the previous case, as the classification dispute remained similar, and there had been no change in tariff entries for the relevant period in the current case.Legal Precedent Consideration:The appellant's counsel attempted to differentiate the current case from the previous interim order by referring to a Supreme Court decision in CCE v. Sharma Chemical Works [2003 (154) E.L.T. 328 (S.C.)]. The Tribunal examined the cited case law and found that it pertained to Ayurvedic medicaments, which were distinct from the product under consideration in the present case. The Tribunal rejected the appellant's argument based on the Supreme Court decision, emphasizing the differences in the products involved.Interim Order and High Court Decision:The appellant's counsel also highlighted a High Court decision that had substituted 'pre-deposit in cash' with 'production of a bank guarantee for an equal amount.' The Tribunal disagreed with this submission, clarifying that the High Court's direction related to an interim order by the Commissioner (Appeals) and was not directly applicable to the final order under consideration. The Tribunal emphasized that the prima facie case at the first appellate stage might differ from that at the second appellate stage, and therefore, the High Court's direction did not apply to the current situation.Final Decision and Direction:In conclusion, the Tribunal directed the appellants to pre-deposit an amount of Rs. 20 lakhs within 12 weeks from the date of the order and report compliance by a specified date. It was clarified that upon compliance with this direction, there would be a waiver of pre-deposit and a stay of recovery concerning the penalty amount and the remaining duty balance.