2011 (2) TMI 1162 - AT - Central Excise

Waiver of pre-deposit - Classification - appellants has been manufacturing and clearing dutiable goods without payment of duty and as the waste and scrap which is generated in the factory premises cleared without payment of duty - Held that - As the appellant herein is a central engineering workshop of Indian Railways. The alleged dutiable goods are used only for the purpose of Indian railways in Central railway. This item would merit classification under Chapter 86 of the CETA 1985. Revenue s demand to classify under Chapter heading 84 as parts of machinery and more specifically as parts of conveyor system seems to be prima facie erroneous - assessee has made out a case for total waiver of pre-deposit.

Summary

Issues:
Waiver of pre-deposit of duty, penalty, interest under Central Excise Rules, 2002.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of confirmed duty amount, penalty under Section 11AC of the Act, further penalty under Rule 25 of Central Excise Rules, 2002, and interest on the confirmed duty amount. The Tribunal heard both parties and examined the records. The duty and penalty were confirmed due to the alleged manufacturing and clearance of dutiable goods without payment of duty, including waste and scrap cleared without duty payment. The appellant, a central engineering workshop of Indian Railways, used the goods for the purpose of Indian Railways in Central railway. The Tribunal noted that the goods should be classified under Chapter 86 of the CETA 1985, contrary to Revenue's classification under Chapter heading 84 as parts of machinery, specifically parts of a conveyor system. The Tribunal found Revenue's classification prima facie erroneous and considered that the legal submissions could be reviewed at the final appeal disposal. The Tribunal, being of the view that the appellant established a case for total waiver of pre-deposit, allowed the application for waiver and stayed the recovery until the appeal's disposal.