2013 (8) TMI 1 - AT - Central Excise

Classification of the product Liquid Paraffin Wax under Chapter heading 3824 or 27.12 of the Central Excise Tariff Act Held that - Paraffin Wax comes in liquid form as well as in solid state It is undisputed fact that the appellant is manufacturing only Liquid Paraffin Wax and are not manufacturing solid Paraffin Wax - Board Circular dated 01.08.2011 specifically indicates that HSN Explanatory Notes, as indicated in (B) (9) as classification of Chlorinated Paraffins/ Chloroparaffins (in liquid) to get classified under Chapter heading 38.24. The entire Central Excise Tariff Act is now aligned with HSN tariff and hence if there is no dispute that the appellant is manufacturing Chlorinated Paraffins/ Chloroparaffins in liquid form, then the classification of the said product, prima-facie, would be covered under Chapter 38 - prima facie case in favor of assessee - stay granted.

Summary

Issues:
Classification of the product under Chapter heading 3824 or 27.12 of the Central Excise Tariff Act.

Analysis:
The appellant filed a stay petition seeking the waiver of pre-deposit of a differential amount of duty, interest, and penalty confirmed by the adjudicating authority. The main dispute revolved around the correct classification of the appellant's product, Liquid Paraffin, under Chapter heading 3824 or 27.12 of the Central Excise Tariff Act. The appellant argued that their product was correctly classified under Chapter 3824, while the department insisted on classifying it under Chapter 27. The appellant claimed that they initially classified the product under Chapter 27 due to pressure from the department but rectified the error and started clearing the goods under Chapter 38. The appellant's classification was supported by a Board Circular dated 01.08.2011, which clarified that Paraffin Wax in liquid form should be classified under Chapter 38.24 based on the HSN Explanatory notes. The adjudicating authority dropped proceedings for one show cause notice post budget 2010, aligning the classification with Chapter 34 for Solid Paraffin Wax.

The departmental representative contended that the appellant classified the same product, Liquid Paraffin Wax, under Chapter 27 for export and Chapter 38 for home consumption to avail ineligible DEPB credit. However, after careful consideration of submissions and records, the tribunal found that the issue centered on the classification of Liquid Paraffin Wax manufactured by the appellant. As the appellant only produced Liquid Paraffin Wax and not solid Paraffin Wax, the tribunal referred to the Board Circular, which specified that Chlorinated Paraffins/Chloroparaffins in liquid form should be classified under Chapter heading 38.24. Since the Central Excise Tariff Act aligns with the HSN tariff, and there was no dispute regarding the liquid form of the product, the tribunal concluded that the prima facie classification should fall under Chapter 38. The legal arguments presented by the departmental representative could be considered during the final disposal of the appeal.

Based on the above analysis, the tribunal found that the appellant established a prima facie case for the waiver of pre-deposit of the amounts involved. Consequently, the tribunal allowed the application for the waiver of pre-deposit and stayed the recovery until the appeal's final disposal.