2007 (4) TMI 468 - AT - Central Excise

Challenged Classification of 'Rice Flakes' for Duty Benefit: Tribunal Grants Stay

The appellants contested the classification of 'Rice Flakes/Poha' under Heading 1904 of CET, seeking the benefit of Notification No. 08/2001-C.E. despite ... Stay/Dispensation of pre-deposit - Held that: - As the learned JDR wants to get comments from the Commissioner on the applicability of the Larger Bench judgment, we are proceeding to grant Ad Interim Stay against the recovery of the amounts till the stay application is disposed of. Issues:Classification of Rice Flakes/Poha under Heading 1904 of CET, denial of benefit under Notification No. 08/2001-C.E., applicability of Tribunal rulings, interpretation of Larger Bench judgment in Mahavir Food Products case, request for waiver, grant of Ad Interim Stay against recovery.Classification of Rice Flakes/Poha under Heading 1904:The appellants were required to pre-deposit a significant duty amount and penalty for producing 'Rice Flakes/Poha' under the brand name 'Bhagyalakshmi.' The Revenue classified the item under Heading 1904 of CET for the period 1-4-2002 to 31-3-2005, denying the benefit of Notification No. 08/2001-C.E. The Commissioner based the classification on a Tribunal ruling in M/s. Favourite Food Products v. CCE, Rajkot. The appellants argued that the rice converted into flakes should be classified under CH 11.01 with a 'Nil' rate of duty, contrary to the Tribunal ruling.Interpretation of Larger Bench Judgment - Mahavir Food Products case:The appellants presented a Larger Bench judgment in Mahavir Food Products & Others v. CCE, Vadodara, which overturned the decision in M/s. Favourite Food Products case. The appellants emphasized that the item in question was rice, not corn like in the previous case, and should be treated as flakes for classification under CH 11.01 with a 'Nil' rate of duty. They sought a waiver based on the new judgment's relevance to their situation.Grant of Ad Interim Stay against Recovery:Considering the arguments and the overruling of the previous Tribunal ruling by the Larger Bench judgment, the Tribunal found the appellants had a strong case. The Tribunal granted an Ad Interim Stay against the recovery of amounts until the stay application was resolved. The Commissioner was given time to provide comments on the applicability of the Larger Bench judgment. The matter was scheduled for a final hearing, with a directive for the Revenue not to proceed with recovery until then.This detailed analysis of the judgment highlights the issues of classification, Tribunal rulings, interpretation of the Larger Bench judgment, the request for waiver, and the grant of Ad Interim Stay against recovery, providing a comprehensive overview of the legal proceedings and decisions made by the Appellate Tribunal CESTAT, Bangalore.