Classification dispute on animal feed grade phosphate led to partial pre-deposit and stay of balance recovery.

A classification dispute over Di-calcium Phosphate (Animal Feed Grade) was treated as arguable after tariff restructuring from 01.03.2005, with the correct heading left for final hearing. The declarations filed by the assessee showed prior departmental knowledge of the product description, which prima facie weakened invocation of the extended period at the interim stage. Balancing these factors, the Tribunal granted only partial relief by directing a limited pre-deposit of Rs. 3,00,000 and staying recovery of the balance on compliance.

---

---

Issues: Whether the appellant was entitled to waiver of pre-deposit and stay of recovery in a classification dispute involving Di-calcium Phosphate (Animal Feed Grade), and whether the demand raised by invoking the extended period required full deposit at the interim stage.

Analysis: The dispute concerned classification of the product manufactured and cleared as Di-calcium Phosphate (Animal Feed Grade). The declarations filed by the appellant were relied upon to show that the department had prior knowledge of the manufacture and the product description, which prima facie weakened the basis for invoking the extended period. At the same time, the classification question was held to be arguable after the tariff restructuring from 01.03.2005, and the correct heading could be determined only at final hearing. In these circumstances, the Tribunal balanced the rival claims by securing the demand to the extent of a limited pre-deposit and granting stay on the balance.

Conclusion: The appellant was granted partial relief by being directed to make a pre-deposit of Rs. 3,00,000, with stay of recovery of the balance amount on compliance.

---