2004 (2) TMI 585 - AT - Central Excise

Issues: Waiver of pre-deposit of duty and penalties, classification of manufactured goods, financial hardship, limitation period, suppression of facts.

Waiver of Pre-Deposit of Duty and Penalties:
The applicants sought waiver of pre-deposit of total duty and penalties amounting to Rs. 3,40,68,713. The demand was based on the allegation that the applicants were manufacturing fire clay bricks and stoneware pipes without paying duty. The applicants argued that they regularly filed classification lists claiming exemption under Notifications for their products. They contended that the demand beyond the normal limitation period was unsustainable. The Tribunal noted that the applicants had a strong case on limitation as they had filed approved classification lists during the disputed period, claiming exemption. However, considering the arguments made by the Revenue, the Tribunal directed the applicants to deposit Rs. five lakh within six weeks, while waiving the pre-deposit of the remaining duty and penalties for the appeal hearing.

Classification of Manufactured Goods:
Regarding the classification of goods, the applicants claimed that the bricks they manufactured were not fire clay bricks as alleged. They argued that refractory goods are those with high-temperature resistance, which their bricks did not possess. Similarly, they contested that their stoneware pipes were not slip glazed as asserted by the Revenue. The Revenue supported its claims by stating that the clay used by the applicants for bricks was fire clay and that the stoneware pipes' surface was slip glazed according to a Chemical Examiner's report. The Tribunal did not delve deeply into the classification issue but focused more on the limitation and financial aspects.

Financial Hardship:
The applicants pleaded financial hardship, citing losses in their business operations. However, the Revenue pointed out that the applicants had sufficient income from sales based on their balance sheet. Despite the financial difficulties claimed by the applicants, the Tribunal considered the overall circumstances of the case and directed a partial deposit while waiving the remaining amount for the appeal hearing.

Limitation Period and Suppression of Facts:
The Revenue contended that the applicants suppressed facts regarding their products, leading to evasion of duty payment. The Tribunal acknowledged that the applicants had not fully disclosed facts about their products. However, since the applicants regularly filed classification lists within the normal limitation period, the Tribunal found a strong case on limitation. The Tribunal did not find the case suitable for a total waiver of duty due to the Revenue's arguments but allowed a partial waiver upon a specified deposit.

In conclusion, the Tribunal's decision balanced the considerations of limitation, financial status, and classification issues while granting a partial waiver of duty and penalties for the appeal hearing, emphasizing the need for a deposit to proceed with the case.

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