2003 (9) TMI 494 - AT - Central Excise

Summary

Issues:
Classification of disputed products under Chapter Heading 48.06, Benefit of exemption under Notification 138/86 and 23/94, Prima facie case for waiver of pre-deposit of duty.

Classification Issue:
The judgment pertains to an application for waiver of pre-deposit of differential duty amounting to Rs. 6,41,87,322 arising from the Commissioner of Central Excise (Appeals), Pune's order confirming duty demand due to the classification of products like Intaglio paper, SC Intaglio, Opaline, SC Kraft paper, and Opaque laminating base paper under Chapter Heading 48.06. The applicants contended that the disputed goods fall under Chapter 48 of the Schedule to the Central Excise Tariff Act and are covered by Notification 138/86 and 23/94. The Tribunal found this contention well-founded as goods under Heading 48.06 were not exempted from the coverage of the notifications, and all goods under Chapter 48 were entitled to exemption under Notification 23/94. The Tribunal held that a strong prima facie case for waiver existed, as the conditions of the notifications were prima facie satisfied, and thus waived the pre-deposit of duty pending appeal.

Exemption Benefit Issue:
The applicants argued that even if the department's classification was accepted, they were entitled to the benefit of Notification 138/86 (up to 28-2-1994) and Notification 23/94 (from 1-3-1994) as goods under Chapter 48 were covered by these notifications during the relevant period. The Tribunal agreed with this argument, stating that the notifications did not exclude goods under Heading 48.06 from their ambit. Moreover, the conditions of the notifications, such as the requirement for concessional duty rates for paper made from unconventional raw materials, were prima facie satisfied, as evidenced by the test report showing that the paper was made from pulp containing over 50% bagasse. Consequently, the Tribunal found a strong prima facie case for waiver and stayed the recovery of duty pending appeal.

Prima Facie Case for Waiver Issue:
In considering the application for waiver of pre-deposit, the Tribunal assessed whether a strong prima facie case for waiver had been established by the applicants. It noted that the conditions of the relevant notifications were prima facie satisfied, and the applicants had made a compelling case for exemption from pre-deposit of duty. Based on this analysis, the Tribunal concluded that the applicants had indeed demonstrated a strong prima facie case for waiver and, therefore, decided to waive the pre-deposit of duty and stay the recovery pending the appeal process.