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2010 (12) TMI 468 - HC - Central ExciseWaiver of pre-deposit - Classification - In the case of Caprihans India Ltd. v. Commissioner of Central Excise. Aurangabad 2002 -TMI - 51304 - CEGAT, WEST ZONAL BENCH, MUMBAI, the Tribunal by its order dated 14-6-2002 held that the goods in question could be classified under Tariff Heading 3916 but not under Tariff Heading 3920.39 as claimed by the assessing officer. That order of the Tribunal has been upheld by the Apex Court - the issue of classification had attained finality, the Tribunal could not have ordered deposit of Rs. 15,00,000/- merely because the appellant had stated that the observation of the Tribunal in the case of Caprihans India Ltd. to the effect that the goods in question could be classified under Tariff Heading 3916 is not acceptable to the appellant - The Tribunal was not justified in directing pre-deposit of Rs. 15,00,000/- when the classification made by the Commissioner was contrary to the binding decision of the Tribunal in the case of Caprihans India Ltd. - The impugned order is quashed and set aside and the CESTAT is directed to hear the appeal of the Appellant on merits without any pre-deposit.
Issues:
Classification of goods under Tariff Heading 3926.90 or 3920.39, Justification of directing deposit under Section 35F of the Act. Classification of Goods: The case involved a dispute regarding the classification of goods manufactured by the Appellant under Tariff Heading 3926.90 or 3920.39. The Commissioner of Central Excise had classified the goods under Tariff Heading 3920.39, leading to an appeal by the Appellant before the CESTAT. The CESTAT directed the Appellant to deposit Rs. 15,00,000 based on the appellant's claim that a previous case's classification decision was not applicable to their situation. However, the High Court noted that the goods manufactured by the Appellant were similar to those in the previous case, where the Tribunal had classified them under Tariff Heading 3916, a decision upheld by the Apex Court. The High Court emphasized that the Commissioner should have classified the goods under Tariff Heading 3916 based on the previous binding decision. Therefore, the Tribunal was not justified in ordering the deposit when the classification made by the Commissioner was contrary to the binding decision. Justification of Deposit under Section 35F: The main issue was whether the Tribunal was justified in directing the Appellant to deposit Rs. 15,00,000 under Section 35F of the Act. The High Court held that since the issue of classification had already been settled by a previous binding decision, the Tribunal's directive for the deposit was not valid. The High Court quashed the impugned order and directed the CESTAT to hear the appeal on merits without any pre-deposit, emphasizing that the Tribunal could not order a deposit based on the appellant's disagreement with the previous classification decision when the Commissioner's classification was contrary to the binding decision. In conclusion, the High Court set aside the impugned order, directing the CESTAT to hear the appeal on merits without any pre-deposit, highlighting the importance of adhering to binding decisions in classification matters and emphasizing that a deposit should not be ordered based on a disagreement with a previous decision when the Commissioner's classification contradicts the binding decision.
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