2006 (2) TMI 456 - AT - Central Excise

Summary

Issues:
1. Correct classification of various products under Central Excise Tariff Act, 1985.
2. Clubbing of clearance of multiple units for demanding duty.
3. Prima facie case on merit and time bar for waiver of pre-deposit.
4. Financial hardship of the appellants.
5. Classification discrepancy and demands confirmation on individual units.

Analysis:

Issue 1 - Correct Classification of Products:
The appeals revolve around the correct classification of products like Synthetic Rubber Master Batch, Colour Master Batch, EVA mixes, and others under the Central Excise Tariff Act, 1985. The appellants seek reduced duty liability by challenging the classification done by the Commissioner and claim the denial of SSI exemption is incorrect. The Commissioner's classification under various Chapter sub-headings is contested by the appellants who argue for a different classification under Chapter sub-headings 4005.10 or 4005.20. Additionally, the benefit of Notifications related to captive intermediate products is also challenged.

Issue 2 - Clubbing of Clearance for Duty Demand:
The Revenue proceeded against multiple concerns owned by the same individual by clubbing their clearances for demanding duty. However, it is argued that when separate entities have distinct identities, their clearances cannot be clubbed. The demands confirmed on each unit separately while treating them as one entity raises a contradiction. The demands are required to be confirmed by treating the other concerns as dummy units if they are considered the same as the main concern.

Issue 3 - Prima Facie Case and Time Bar for Waiver of Pre-deposit:
The appellants argue for a waiver of pre-deposit based on a strong prima facie case on merit, time bar, and financial hardship. They contend that the demands are not sustainable and that the Commissioner's order exceeds the terms of the show cause notice. The appellants claim that the total liability would not exceed Rs. 7 lakhs even if the order is upheld.

Issue 4 - Financial Hardship of Appellants:
The appellants face financial hardship and are unable to comply with pre-deposit requirements due to severe financial constraints. They present financial details supported by a Chartered Accountant's certificate to demonstrate their inability to pre-deposit the required amounts.

Issue 5 - Classification Discrepancy and Demands Confirmation:
There is a discrepancy in the classification of products, specifically the Synthetic Rubber Master Batch, which was initially classified under a different heading by the Commissioner. The appellants argue that the correct heading has been denied, leading to an unsustainable order. The appellants emphasize their financial hardship and the challenges they face in complying with pre-deposit requirements.

In conclusion, the Tribunal grants waiver from pre-deposit subject to a specific amount to be deposited by the appellant within a specified period. The decision takes into account the financial hardship faced by the appellants and the need for further clarification on classification and demands confirmation.