Appeal allowed, impugned order set aside. Case remanded for lower authority to decide after Rs. 1 crore deposit.

The appeal was allowed, and the impugned order was set aside. The case was remanded for the lower appellate authority to decide on the merits after the appellant complied with the reduced pre-deposit of Rs. 1 crore.

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Issues involved: Classification of "processed oil" under SH 2707.90 vs. SH 2713.30 of the CETA Schedule, compliance with Section 35F of the Central Excise Act for appeal, prima facie case against the demand of duty.

Classification Dispute: The appellants argued that the "processed oil" resulted from blending extracts of residual oil, making it classifiable under SH 2713.30. However, the Board classified it under SH 2707.90, which was considered binding. The blending process was claimed to adjust viscosity for the rubber industry, but the absence of a chemical reaction was not supported by evidence. As no prima facie case was established for SH 2713.30 classification, a reduced pre-deposit of Rs. 1 crore was ordered for appeal continuation.

Compliance with Section 35F: The Commissioner (Appeals) had demanded a pre-deposit of Rs. 3 crores for appeal consideration, which the party failed to submit, leading to dismissal. The Tribunal reduced the pre-deposit amount to Rs. 1 crore considering the appellant's status as a PSU and directed compliance within 30 days for appeal resolution on merits.

Decision: The impugned order was set aside, and the appeal was allowed by remand for the lower appellate authority to decide on the merits after the reduced pre-deposit compliance.

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