2009 (10) TMI 715 - AT - Central Excise

Waiver of pre-deposit - denial on benefit of N/N. 4/2006-C.E., dated 1-3-2006 as amended by N/N. 37/2006-C.E., dated 20-7-2006 - The case of the Revenue is that the concessional rate of duty is in respect of pure, terephthalic acid and the purified terephthalic acid manufactured and cleared by the applicants is having purity of 99.8% - Held that - The goods manufactured by the applicants is classified under Tariff Heading 2917 36 00 and having purity of 99.8% - The Flow Chart produced by the applicants in respect of their product shows the process of purification and the product in the market is known as Purified Terephthalic Acid (PTA) and there is no stipulation in the Tariff or in the HSN Explanatory Notes as well as the Notification regarding purity of the product - it is a fit case for total waiver of duty and penalty - petition allowed - decided in favor of petitioner.

Summary

Issues:
Waiver of pre-deposit of duty and penalty based on the interpretation of Notification No. 4/2006-C.E. dated 1-3-2006 as amended by Notification No. 37/2006-C.E. dated 20-7-2006.

Analysis:

The case involved an application for the waiver of pre-deposit of duty amounting to Rs. 63,39,50,529/- and an equal penalty. The dispute arose from the denial of the benefit of Notification No. 4/2006-C.E. dated 1-3-2006, as amended by Notification No. 37/2006-C.E. dated 20-7-2006. This notification provided a concessional rate of duty for pure terephthalic acid under Tariff Heading 2917 36 00. The Revenue contended that the purified terephthalic acid manufactured by the applicants, with a purity of 99.8%, did not qualify as "pure" under the notification, which required 100% purity for the benefit to apply.

The Tribunal noted that there was no dispute regarding the classification of the goods under Tariff Heading 2917 36 00 with a purity of 99.8%. The Tribunal observed that neither the Tariff nor the HSN Explanatory Notes specified any purity requirement for the product. The applicants presented a Flow Chart demonstrating the purification process, resulting in the market product known as Purified Terephthalic Acid (PTA). Since there was no explicit stipulation in the Tariff, HSN Explanatory Notes, or the Notification regarding the purity level, the Tribunal found it to be a fit case for total waiver of duty and penalty.

Consequently, the Tribunal granted the waiver of pre-deposit of duty, penalty, and interest for the appeal's hearing. The recovery of the same was stayed during the pendency of the appeal, allowing the stay petition. The decision was dictated and pronounced in the open court, providing relief to the applicants pending the final resolution of the appeal.