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2012 (10) TMI 39 - HC - Central ExcisePayment of differential excise duty on decorative laminated sheets - treating the goods to be classified under sub heading 4823.90 OR 3920.31 - Held that - As decided in COLLECTOR OF CENTRAL EXCISE, HYDERABAD Versus BAKELITE HYLAM 1997 (7) TMI 154 - SUPREME COURT OF INDIA that such goods fall under sub heading 3920.31. Thus as the dispute with regard to payment of excise duty under sub heading 3920.31 is resolved the appellant was required to pay the differential duty. Waiver of Pre deposits - undue hardship - Held that - For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it. Thus while safeguarding the interest of the revenue it has directed the appellant to deposit the entire amount of balance duty, except interest.
Issues:
1. Interpretation of Section 35-G of the Central Excise Act, 1944 regarding deposit of balance duty. 2. Classification of goods under sub headings 4823.90 and 3920.31. 3. Validity of show cause notices for demanding duty. 4. Consideration of provisional assessments and issuance of show cause notices. 5. Application of principles of undue hardship and safeguarding revenue interests under Section 35-F. Issue 1: Interpretation of Section 35-G of the Central Excise Act, 1944 regarding deposit of balance duty: The appellant challenged the order of the Customs, Excise & Service Tax Appellate Tribunal directing the deposit of the balance of duty over and above 50% of the duty in compliance with Section 35-F of the Act. The Tribunal stayed recovery pending appeal disposal upon deposit. The High Court upheld the Tribunal's order, emphasizing the need to deposit the entire balance duty except interest to safeguard revenue interests. Issue 2: Classification of goods under sub headings 4823.90 and 3920.31: The dispute arose from the classification of 'decorative laminated sheets' under sub headings 4823.90 and 3920.31. The Supreme Court in Bakelite Hylam Ltd case clarified the classification as under sub heading 3920.31. The appellant's contention on provisional assessments and show cause notices was rejected, and the Tribunal held the goods fell under sub heading 3920.31, necessitating payment of differential duty. Issue 3: Validity of show cause notices for demanding duty: The appellant argued against the validity of show cause notices issued from 1993 to 1994, contending that provisional assessments precluded such demands. However, the Tribunal found the notices valid as the classification issue was settled by the Supreme Court, and the dispute on provisional assessments was deemed technical and to be decided at the final hearing. Issue 4: Consideration of provisional assessments and issuance of show cause notices: The appellant claimed that no show cause notice could be issued due to provisional assessments. The Tribunal, however, noted the continuous issuance of notices for demanding differential duty based on the final classification decision. The appellant's argument on the timing of show cause notices vis-a-vis provisional assessments was considered for final determination during the appeal hearing. Issue 5: Application of principles of undue hardship and safeguarding revenue interests under Section 35-F: The parties relied on precedents to argue the application of undue hardship and safeguarding revenue interests under Section 35-F. The appellant emphasized the need for a prima facie case due to provisional assessments, while the respondent stressed the necessity of paying the differential duty following the Supreme Court's classification decision. The High Court found no error in the Tribunal's order, emphasizing the consideration of both prima facie case and undue hardships while directing the deposit of the balance duty to safeguard revenue interests. In conclusion, the High Court dismissed the Central Excise Appeal, extending the compliance time for the appellant. The judgment highlighted the importance of complying with deposit requirements under Section 35-F and the finality of the Supreme Court's classification decision in resolving the dispute over differential duty payment. The issues of provisional assessments, show cause notices, and the application of undue hardship principles were to be further deliberated during the appeal hearing.
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