2002 (1) TMI 528 - AT - Central Excise

Summary

Issues:
1. Pre-deposit of duty amount and penalty imposed by the Commissioner.
2. Classification of polyester fibre waste under Rule 57F(4) Challans.
3. Discrepancy in considering technical reports and evidence by lower authorities.
4. Granting waiver of pre-deposit to sick units under BIFR.
5. Violation of principle of natural justice in not considering evidence.
6. Remand of the appeal to original authorities for reconsideration.

Analysis:
1. The appellant was required to pre-deposit duty and penalty. The case involved the clearance of polyester fibre waste under Rule 57F(4) Challans. The Revenue contended that the item should have been removed under Rule 57F(18) by paying duty. The appellant argued that the cleared item was only fibre waste, technically called "Polyester," not waste of the final product. They provided test results and technical reports from SITRA, which were not considered by lower authorities. The appellant sought a remand for de novo consideration due to the lack of findings on the evidence.

2. The Revenue opposed the waiver of pre-deposit, insisting the appellants should have cleared the waste under Rule 57F(18). The Department did not acknowledge the appellant's evidence from SITRA's report. The Commissioner's report mentioned that the fibres cleared were waste as per their invoices. The Revenue highlighted that the appellant was only registered under BIFR but not declared as a sick unit, arguing against granting a waiver.

3. The Tribunal observed a discrepancy in the consideration of evidence by the lower authorities. The appellants had presented test results and opinions from SITRA, which were not referenced in the impugned order. The Tribunal noted a violation of the principle of natural justice as the Revenue failed to produce evidence or consider the appellant's submissions regarding the distinction between fibre waste and waste. Consequently, the Tribunal granted a waiver of the pre-deposit and stayed its recovery.

4. Given the issues raised and the lack of proper consideration of evidence, the Tribunal decided to remand the appeal to the original authorities for a fresh review. The original authorities were directed to reconsider the matter in light of the appellant's evidence. The Revenue was instructed to conduct tests and provide evidence on the nature of the product, while the appellants were granted an opportunity to respond. The authorities were mandated to pass a speaking order after reevaluation, ultimately allowing the appeal by way of remand.