2009 (4) TMI 700 - AT - Central Excise

Summary

Issues:
1. Waiver of pre-deposit of duty on packed food delivered to foreign airlines for on board consumption.
2. Classification of the product under CETC sub-heading 2106.9099.
3. Applicability of duty rate under Notification No. 3/2006.
4. Interpretation of S. No. 42 of the Table to Notification No. 3/2006.
5. Liability for duty payment for the period before the insertion of S. No. 42.
6. Direction for pre-deposit and stay of recovery pending appeals.

Analysis:
1. The judgment addresses the application for the waiver of pre-deposit of duty amounting to Rs. 2,85,16,640 on packed food supplied to foreign airlines for on board consumption. The duty was confirmed under CETC sub-heading 2106.9099 at a rate of 8% as per Notification No. 3/2006. Additionally, penalties were imposed on the appellant and its Finance Manager.

2. The Tribunal examined the argument that the product is not excisable due to its short shelf life. However, it found merit in the contention that the product could be classified under S. No. 42 of the Table to Notification No. 3/2006, which attracts a 'nil' rate of duty. The description of the goods aligns with the provisions of S. No. 42, and Chapter heading 21.06 pertains to "food preparations not elsewhere specified or included."

3. Since S. No. 42 was introduced in the notification after the relevant period, the applicants were directed to pay duty for the months of March and April 2006, estimated at Rs. 40 lakhs. The Revenue did not contest this amount. The Tribunal ordered a pre-deposit of Rs. 40 lakhs within 8 weeks, after which the balance duty and penalties would be waived, with recovery stayed pending the appeals.

4. The judgment emphasizes the importance of compliance with the pre-deposit directive, failing which the stay would be vacated, and the appeal dismissed. The compliance report was scheduled for 30-6-2009, with the operative part of the order pronounced on 16-4-2009. The decision provides a detailed analysis of the classification, duty liability, and procedural aspects of the case, ensuring a fair and transparent adjudication process.