2009 (5) TMI 649 - AT - Central Excise

Tribunal upholds excisable product classification under Chapter 8536.90.90, rejects appellants' arguments. Stay granted for penalty.

RAMAN BOARDS Versus COMMISSIONER OF CENTRAL EXCISE, DELHI-III

The Tribunal upheld the Department's classification of an excisable product under Chapter 8536.90.90, rejecting the appellants' argument for ... Stay/Dispensation of pre-deposit - Paperboard - Appeal by Department - Non-filing of - Classification of goods Issues Involved:1. Classification of Excisable Product2. Consistency in Departmental Classification3. Prima Facie Case for Grant of Stay4. Applicability of Precedents5. Department's Authority to Change Classification6. Stay of Penalty and InterestDetailed Analysis:1. Classification of Excisable Product:The primary dispute concerns the classification of an excisable product. The Department classified the product under Chapter 8536.90.90 of the tariff, while the appellants argued it should fall under Heading 4810.39.20 and 4805.93.00. The authorities below upheld the Department's classification under 8546.90.90, rejecting the appellants' claim.2. Consistency in Departmental Classification:The appellants contended that the same product manufactured in Karnataka was classified under 4810.39.00 and 4810.39.20, and thus, there was no justification for different treatment for the product manufactured in Sonepat. They argued that the Department should not take discriminatory stands for the same product manufactured by the same company at different locations.3. Prima Facie Case for Grant of Stay:The appellants claimed a prima facie case for a stay without the requirement of pre-deposit, highlighting that they had already deposited Rs. 7,50,000/- by the firm and Rs. 20,000/- by the individual appellant. They relied on various decisions to support their contention that the Department cannot take inconsistent stands for the same product.4. Applicability of Precedents:The appellants referred to several Supreme Court decisions, including Damodar J. Malpani v. Collector of Central Excise, Mallur Siddeswara Spinning Mills (P) Ltd. v. C.C.E., Coimbatore, and Marsons Fan Industries v. Commissioner of C.Ex., Calcutta, to argue that once a classification is accepted, the Department cannot change it without sufficient justification.5. Department's Authority to Change Classification:The Department argued that there is no bar on taking a different view in subsequent years if warranted by the facts. They cited decisions like Collector of Central Excise, Hyderabad v. Bakelite Hylam Ltd., and C.C.E., Bangalore v. Senapathy Symons Insulations (P) Ltd., to support their stance that different factual situations can justify a different classification.6. Stay of Penalty and Interest:The Tribunal acknowledged that it is not expected to delve deeply into the merits of the case while dealing with a stay application. However, it found that the product undergoes fourteen tests before acquiring its final character, which prima facie supports the Department's classification under 8546. The Tribunal allowed the stay application for the penalty but dismissed it for the demand of duty and interest, directing the appellants to deposit the balance amount within twelve weeks.Conclusion:The Tribunal concluded that there is no bar on the Department taking a different view in appropriate cases. The materials on record did not support the appellants' contention that the product should be classified under 4805. The stay application for the penalty was allowed, while the application for the demand of duty and interest was dismissed. The appellants were directed to deposit the balance amount within twelve weeks.