2013 (11) TMI 1148 - AT - Central Excise

Goods Marketable or not - Classification of goods Waiver of Pre-deposit Held that - Heading 85.03 specifically mentioned AC generators (alternators) - according to the assessee, the alternators manufactured are semi-finished ones and it is completed at the hands of Unit-II as part of GPU and classifiable under Heading 88.03, parts of goods of Heading 88.01 or 88.02 - there is dispute of the facts on the clearance of semi-finished alternators, as claimed by the applicant from their Unit-I Unit to Unit-II - it appears that the applicant manufactures alternator, which has essential character of alternator - the applicant has failed to make a prima facie case for waiver of the entire amount of duty - the applicant directed to deposit Rs.25 lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues: Classification of alternators as semi-finished goods under Heading 88.03 or essential goods under Heading 85.01, duty demand, waiver request, and compliance deadline.

Classification Dispute:
The case involved a dispute over the classification of alternators manufactured by the applicants. The Revenue argued that the alternators were of essential character and should be classified under Heading 85.01, while the applicants contended that the alternators were semi-finished and used as parts of a Ground Power Unit (GPU) at Unit-II, thus falling under Heading 88.03. The Tribunal noted that Heading 85.03 specifically mentioned AC generators (alternators), but the applicants claimed their alternators were semi-finished and completed at Unit-II as part of the GPU.

Factual Dispute and Prima Facie Case:
The Tribunal observed discrepancies in the facts presented by the applicant regarding the clearance of semi-finished alternators from Unit-I to Unit-II. While the applicant initially stated that the alternator was finished at Unit-II, they later clarified that only quality control testing and inspection were done at Unit-II. The Tribunal concluded that the alternators manufactured by the applicant had the essential character of alternators, indicating a lack of a prima facie case for waiving the duty demand. Consequently, the applicant was directed to deposit Rs.25 lakhs within eight weeks, with the remaining adjudged dues waived pending appeal disposal.

Compliance Deadline and Stay of Recovery:
The Tribunal set a compliance deadline of 01.08.2013 for the deposit of Rs.25 lakhs by the applicant. Upon deposit, the recovery of the balance adjudged dues was stayed until the appeal's final disposition. This decision aimed to ensure partial payment while providing relief by suspending the recovery process pending the appeal outcome.

In conclusion, the judgment addressed the classification dispute between essential alternators and semi-finished goods, highlighted factual discrepancies in the applicant's claims, assessed the lack of a prima facie case for waiving duty demand, specified a partial deposit requirement, and established a compliance deadline with a stay on recovery pending appeal resolution.