2001 (7) TMI 395 - AT - Central Excise

Waiver granted for duty & penalty in appeal challenging Central Excise Tariff classification

The Tribunal granted a waiver of pre-deposit for duty and penalty in an appeal where duty demand and penalty were confirmed against the appellant by the ... Stay/dispensation of pre-deposit Issues:1. Duty demand and penalty confirmation against the appellant.2. Correct classification of goods under Central Excise Tariff.3. Stay application for waiving pre-deposit of duty and penalty.4. Competency of the Tribunal to determine correct classification of goods.Analysis:Issue 1:The duty demand of approximately Rs. 10 lakhs and a penalty of Rs. 1 lakh were confirmed against the appellant in the impugned order by the Commissioner of Central Excise (Appeals), New Delhi. The appellant filed a Stay Application seeking to waive the pre-deposit of these amounts for the appeal's consideration.Issue 2:The duty demand was upheld based on the finding that CI castings manufactured by the appellant are liable to excise duty under tariff item No. 7207.10 at a rate of 15%, rather than under Tariff Item 8437. The appellant argued that the classification under 7207.10 contradicts the Central Excise Classification scheme. They contended that Chapter 72 pertains to iron and steel, with sub-heading 7207 covering 'semi-finished products of iron or non-alloy steel.' The appellant's production method through gravity die casting was highlighted as different from the continuous cast process for semi-finished products. The appellant asserted a strong prima facie case against the duty demand and penalty, advocating for dispensing with the pre-deposit requirement.Issue 3:In response to the appellant's submissions, the Departmental Representative (DR) argued that regardless of the correct classification, the goods would be subject to excise duty. Referring to a Supreme Court decision, the DR emphasized the Tribunal's authority to determine the correct classification, even if different from the positions of both the Revenue and the assessee. The DR opposed a complete waiver of duty demand, noting the appellant's profitable status.Issue 4:The Tribunal acknowledged that the duty liability and duty rate hinge on the accurate classification of goods under the Central Excise Tariff. Recognizing the appellant's strong prima facie case against the classification in the impugned order, the Tribunal granted a waiver of pre-deposit for duty and penalty. No coercive recovery measures were permitted by the Revenue during the appeal's pendency.Issue 5:The appeal raised concerns about the correct classification of goods, crucial for accurate assessment. Given the ongoing relevance of this issue, the Tribunal directed the case to be heard on a priority basis, out of turn, emphasizing the importance of resolving the classification matter promptly for assessment purposes.