2013 (8) TMI 960 - AT - Central Excise

Summary

Issues involved: Stay petitions for waiver of duty, interest, and penalty on mis-classification of product Magnesium Sulphate under Chapter 31 for availing ineligible Cenvat Credit under Notification No. 1/2011.

The adjudicating authority issued a show cause notice demanding duty and reclassification of the product from Chapter 31 to Chapter 28, stating that the product falls under Chapter 28.

The appellant's counsel argued that the product Magnesium Sulphate, used as fertilizer under the Fertilizer Control Act, should be eligible for the concessional duty benefit under the notification, regardless of its classification.

The Departmental Representative contended that only products falling under Chapter 31 and used as fertilizer are eligible for the concessional rate of duty under Notification No. 1/2011-C.E.

After considering both sides' submissions, the Tribunal found the issue to be debatable - whether the end use of the product as fertilizer determines its eligibility for the concessional rate of duty under the notification.

Given the dispute over the classification of the product and its end use, the Tribunal directed the appellant to pre-deposit Rs. 10 lakhs within eight weeks and report compliance before the Deputy Registrar for further proceedings and disposal of the appeals.

In conclusion, the Tribunal allowed the applications for waiver of pre-deposit of balance amounts involved, subject to compliance with the pre-deposit directive, and stayed the recovery until the appeals are disposed of.