2011 (5) TMI 45 - AT - Central Excise

Classification - Prima facie agree with the ld.Advocate that in the subsequent Notification No.2/2006(NT) dt.1.3.06 the Organic surface active products and preparations for use as soap were included in MRP value only if the same were in the form of bars cakes moulded pieces or shapes - The duty for the period prior to 1.3.06 stand deposited by the appellant - Appeal gets disposed off by way of remand

Summary

Issues:
1. Correct classification of products under Heading 38.08 or 34.02.
2. Applicability of notification under Section 4A for differential duty.
3. Modification of Stay Order based on classification and notification.

Analysis:
1. The dispute in the case revolved around the correct classification of products under Heading 38.08 as claimed by the appellants and Heading 34.02 as contended by the Revenue. The Tribunal had previously decided in favor of the Revenue's classification under Heading 34.02. The appellants sought modification of the Stay Order requiring them to deposit the duty amount.

2. The appellant's advocate argued that even if the products were correctly classified under Heading 34.02, the differential duty was affected by the notification under Section 4A. He pointed out the changes in the relevant notifications, emphasizing that the appellant's liquid products did not fit the description in the amended notification from 1.3.06. Therefore, he contended that no duty liability would arise post the amendment, as they had already paid duty under Section 4A for the earlier period.

3. The Tribunal, after hearing both parties, concurred with the appellant's argument regarding the notification's impact on differential duty post the amendment. They found that the products being in liquid form were excluded from MRP valuation under Section 4A. Consequently, they modified the earlier Stay Order, waiving the pre-deposit condition for the balance duty amount. The Tribunal also noted that the issue regarding the notification was not raised before the adjudicating authority and remanded the matter for fresh consideration, setting aside the impugned order.

This comprehensive analysis outlines the key legal issues, arguments presented, and the Tribunal's decision to modify the Stay Order based on the classification of products and the impact of the notification under Section 4A on the differential duty.