Classification of alternators and pre-deposit waiver denied where goods appeared to have essential character of alternators.

In a classification dispute over alternators, the tribunal found no prima facie case for complete waiver of pre-deposit. The appellant argued that goods cleared from Unit-I were only semi-finished alternators meant for completion at Unit-II as part of a Ground Power Unit under Heading 88.03, but the record contained conflicting factual assertions about the nature of the clearances and the work done at Unit-II. On that basis, the goods appeared to have the essential character of alternators under Heading 85.03, so total waiver was declined. The appellant was directed to deposit Rs. 25 lakhs, and the balance duty demand was stayed pending the appeal.

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Issues: Whether the appellant had made out a prima facie case for complete waiver of pre-deposit in a classification dispute concerning alternators.

Analysis: The dispute turned on whether the goods cleared from Unit-I were only semi-finished alternators meant to be completed at Unit-II as part of a Ground Power Unit falling under Heading 88.03, or whether they had the essential character of alternators classifiable under Heading 85.03. The record showed conflicting factual assertions regarding the nature of the clearance and the activity undertaken at Unit-II. In that setting, the goods appeared to have the essential character of alternators, and a case for total waiver of duty was not established.

Conclusion: Complete waiver of pre-deposit was declined. The appellant was directed to deposit Rs. 25 lakhs, and the balance duty demand was stayed pending disposal of the appeal.

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