2014 (1) TMI 1162 - AT - Central Excise

Correct classification of Goods Waiver of Pre-deposit - Revenue was of the view that product Calcium Hydroxide which is classifiable as Chemical falling under Chapter 28 Held that - The report of Chemical Examiner has not described the impurities present in the product which would be very relevant for deciding the classification appellant was directed to submit Rupees two lakhs fifty thousand as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues: Dispute over classification of product as Hydrated Lime or Calcium Hydroxide, invocation of longer period of limitation, pre-deposit amount waiver.

Classification Dispute: The judgment revolves around the dispute regarding the correct classification of the product manufactured by the appellant, termed as Hydrated Lime by them, but contended by Revenue to be Calcium Hydroxide falling under Chapter 28. The appellant's argument that the goods fall under Chapter 28 is not accepted. The Chemical Examiner's report did not specify the impurities present in the product, crucial for classification. The appellant highlighted Tribunal decisions stating that Hydrated Lime is not subject to excise duty.

Invocation of Longer Limitation Period: The demand was raised by invoking a longer period of limitation, with the show cause notice issued proposing demand confirmation for clearances between May 2009 and March 2010. The appellant mentioned the lower cost of their product compared to pure Chemical Hydroxide, emphasizing the pricing difference as a factor.

Pre-deposit Waiver: Considering the case's merits and limitation period, the judgment directed the appellant to deposit a specified amount within 12 weeks and report compliance by a set date. Upon this deposit, the pre-deposit of the remaining amount was waived, and recovery stayed during the appeal's pendency.

This judgment addresses the core issue of product classification, the impact of the longer limitation period on the demand raised, and the decision on the pre-deposit amount. The tribunal's decision provides clarity on the classification dispute, the significance of the Chemical Examiner's report, and the conditions for pre-deposit waiver, ensuring a fair and reasoned approach to resolving the legal matters at hand.