Interim duty recovery on product classification and exemption claim secured by bank guarantees pending tribunal decision

Pending the appellate tribunal's decision, duty on the product was to be recovered on the footing that it fell under Tariff Entry 4823.90 and qualified for Exemption Notification No. 135/89-C.E. The Court did not finally decide the classification or exemption dispute in the petition. Instead, it followed the interim approach used in connected matters and protected the revenue interest by requiring the differential duty to remain secured through bank guarantees until the appeal was decided.

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Issues: Whether, pending the decision of the appellate tribunal, duty on the product in question should be recovered on the basis of classification under Tariff Entry 4823.90 and entitlement to Exemption Notification No. 135/89-C.E., with the differential duty secured by bank guarantees.

Analysis: The controversy as to classification and exemption was not finally adjudicated in the petition. The Court followed the same interim formula previously adopted in connected matters, directing the department to recover duty for the present on the footing that the product fell under Tariff Entry 4823.90 and that the benefit of Exemption Notification No. 135/89-C.E. was available, while securing the difference in duty by bank guarantees until the appellate tribunal decided the pending appeal.

Conclusion: The petitioner obtained an interim protective arrangement, and the authorities were directed to act on the stated basis until the appellate tribunal's decision.

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