2008 (4) TMI 554 - AT - Central Excise

Summary

Issues involved: Application for waiver of pre-deposit of duty, classification under Tariff heading No. 2710, suitability for use as fuel in spark ignition engines, reliance on government order, sale of solvents to industries.

Waiver of pre-deposit of duty: The judgment addressed the application for waiver of pre-deposit of duty amounting to Rs. 39,33,100/- confirmed on naphtha distillates used for captive consumption in the manufacture of HR SOL and thinners, along with special excise duty on Pet Ether and penalties imposed on the company and its Executive Director under Rule 26 of Central Excise Rules, 2002. The Tribunal considered the evidence and previous decisions to grant unconditional waiver of the pre-deposit of duty and penalty amounts, staying the recovery pending the appeals.

Classification under Tariff heading No. 2710: The issue revolved around the classification of the product under Tariff heading No. 2710, which pertains to motor spirits suitable for use as fuel in spark ignition engines. While the flash point of the product was below 25°C, the Commissioner found no evidence that the goods were being cleared as fuel for spark ignition engines. The Tribunal analyzed the definition of motor spirit and previous case laws to determine that the product, sold to industries for use in pharmaceuticals, paints, and rubber industries, did not meet the criteria for classification under Heading 27.10. Citing relevant case precedents, the Tribunal concluded that a strong prima facie case for waiver of pre-deposit of duty and penalty had been established, leading to the grant of unconditional waiver and stay on recovery.