2006 (6) TMI 458 - AT - Central Excise

Summary

Issues: Duty demand prior to 1-3-2005, Duty demand after 1-3-2005, Proper classification of goods under Chapter 25 or Chapter 68, Prima facie case for duty demand prior to 1-3-2005, Acceptance of deposit for hearing appeal.

In the present case, the main issue revolves around the duty demand against the appellant for the period before and after 1-3-2005 concerning the production of marble slabs and polished marble tiles. Before 1-3-2005, the appellant did not pay duty based on the belief that the products did not amount to manufacture, relying on a Supreme Court judgment. However, post 1-3-2005, they started clearing goods on payment of duty under a specific notification. The authorities confirmed the duty demand prior to 1-3-2005, arguing that a change in tariff classification invalidated the earlier Supreme Court decision. The Tribunal disagreed, stating that classification comes after establishing whether the processes amount to manufacture, and the change in tariff alone does not affect this determination without corresponding changes in definitions. Thus, a prima facie case was found in favor of the appellant for duty demand prior to 1-3-2005.

Regarding duty demand after 1-3-2005, it was confirmed based on the classification of goods under Chapter 25 instead of Chapter 68. The introduction of Chapter Note 6 to Chapter 25 deemed certain processes as manufacture, leading to the goods being classified under Chapter 25. Since there was no similar provision in Chapter 68, the Supreme Court judgment applied. Notably, the duty prescribed by the notification was the same for marble slabs falling under either chapter. The Tribunal found the appellant's classification under Chapter 25 to be correct due to the deeming fiction created by Chapter Note 6, supporting the prima facie classification under Chapter 25.

An additional issue arose when the appellant offered to deposit a sum for the appeal hearing, which the Tribunal deemed fair and accepted. The appellant was directed to deposit the specified amount within a set period. This deposit was considered satisfactory for the purpose of hearing the appeal. The judgment concluded with this directive, allowing for compliance within the stipulated timeframe.