2006 (3) TMI 363 - AT - Central Excise

Stay/Dispensation of pre-deposit - Classification - Hearing, early hearing - Stay application

Summary

Issues:
Classification of goods as cosmetics or ayurvedic medicaments, waiver of pre-deposit, stay of recovery pending appeal.

Classification of Goods:
The judgment revolves around the classification of goods manufactured by the appellants, which were classified as cosmetics by the Commissioner despite the appellants claiming them to be ayurvedic medicaments and preparations. The tribunal referred to a previous order by the Apex Court, emphasizing that a change in classification is not justified without a change in the nature or use of the product or a fresh interpretation of the tariff heading. The tribunal found that the impugned order did not specify the new test relied upon by the Commissioner, which was not available in earlier proceedings. Due to this lack of clarity, the tribunal concluded that the appellants had a strong case for a full waiver of the pre-deposit requirement under Section 35F of the Central Excise Act, 1944.

Waiver of Pre-Deposit and Stay of Recovery:
The tribunal, after considering the nature of the issue and the duty amounts involved, decided to grant the appellants' request for a full waiver of the pre-deposit requirement and ordered the stay of recovery pending the regular hearing of the appeals. The tribunal also acceded to the oral prayer of the departmental representative and scheduled the appeal itself for final hearing on a specified date. By disposing of the applications in this manner, the tribunal ensured that the appellants were not burdened with the pre-deposit requirement and that the recovery of the disputed amounts was put on hold until the final hearing of the appeals.

In conclusion, the judgment by the Appellate Tribunal CESTAT, Mumbai dealt with the classification of goods as cosmetics or ayurvedic medicaments, the grant of a full waiver of the pre-deposit requirement, and the stay of recovery pending the final hearing of the appeals. The tribunal focused on the lack of clarity in the Commissioner's decision regarding the new test relied upon for classification, leading to a favorable ruling for the appellants in terms of the waiver and stay of recovery.