2013 (10) TMI 791 - AT - Central Excise

Classification of the product - Interpretation of the Exemption Notification No.06/2002 Waiver of Pre-deposit Held that - Prima facie, ice-cream and non-alcoholic beverages, prepared and dispensed by vending machines only would be eligible to the benefit of exemption - It is an admitted fact that the Softy Mix is not directly dispensed by the Applicant through vending machines, but cleared in bulk from their premises. The condition of exemption against the said Notification is very specific saying that ice-cream and non-alcoholic beverages, prepared and dispensed by vending machines only, are eligible for the benefit Following CCE, New Delhi vs. Hari Chand Shri Gopal 2010 (11) TMI 13 - SUPREME COURT OF INDIA - The condition of a Notification be strictly fulfilled to avail the benefit - the Applicant could not able to make out a prima facie case for total waiver of pre-deposit of the dues - the Applicant are directed to deposit 25% of the duty upon such submission balance would stand waived and its recovery stayed during pendency of the Appeals - Partial stay granted.

Summary

Issues:
Classification of 'Softy Mix' product under two alternative headings, interpretation of exemption Notification No.06/2002-CE, invocation of extended period of limitation.

Classification Issue:
The Applicant claimed classification of 'Softy Mix' under Heading No.21069099 or Heading No.21050000, citing the Tribunal's decision which was overruled by the Supreme Court. They now argue for classification under Heading No.21050000. However, the exemption under Notification No.06/2002-CE is crucial, applicable to both headings. The condition of the Notification specifies that only ice-cream and non-alcoholic beverages dispensed by vending machines are eligible for exemption. As 'Softy Mix' was not directly dispensed through vending machines but cleared in bulk, the condition was not met. The Tribunal held that the Applicant failed to establish a prima facie case for total waiver of predeposit, directing them to deposit 25% of the duty within six weeks.

Exemption Notification Interpretation:
The exemption under Notification No.06/2002-CE is specific, allowing benefits for ice-cream and non-alcoholic beverages dispensed solely through vending machines. The Applicant's argument that the products were ultimately dispensed through vending machines did not align with the strict condition of the Notification. The Tribunal emphasized the need for strict compliance with the Notification's conditions, following the Supreme Court's precedent. As 'Softy Mix' was not dispensed directly through vending machines, the Applicant did not meet the criteria for exemption.

Extended Period of Limitation Issue:
The Applicant contested the invocation of the extended period of limitation, arguing that all relevant facts were known to the Department, negating any suppression of facts. The Revenue maintained that the issue of limitation involves a mixed question of law and facts, subject to scrutiny during the Appeals disposal. The Tribunal did not delve into the limitation issue but focused on the classification and exemption aspects, directing the Applicant to make a partial deposit pending the final decision.