2015 (2) TMI 834 - AT - Central Excise

Waiver of pre deposit - Classification of goods - Classification under 4819 2020 and or 4819 2090 - Boxes / Carons or others - Held that - Issue is regarding the classification of the product which gets produced in the appellant s premises. The classification sought by the Department is that this would get covered under the category of boxes or cartons. The demonstration which has been provided by the ld.Counsel indicates that these would not be boxes. At the same time, it could also be possible that these products may fall under the category of others. There is an element of the doubt as to the correct classification of the product and such classification can be considered by us only at the time of final disposal of appeals. At this juncture, we are of the view that the appellants should be put to some condition for hearing and disposing the appeals on merit - Partial stay granted.

Issues involved: Classification of the product, Stay Petition, Manufacturing process, Duty liability, Interpretation of rules and HSN explanatory note.

Classification of the product:
The issue in this case revolves around the correct classification of the product manufactured by the appellant. The appellant's counsel argues that the product should not be classified as boxes or cartons based on the HSN explanatory note, demonstrating that the product does not fall under these categories. On the other hand, the Department contends that the product does fall under the category of boxes or cartons based on the manufacturing process recorded by the adjudicating authority. The Tribunal acknowledges the contentious nature of the issue and decides that the correct classification can only be determined at the final disposal of the appeals. As a condition for further proceedings, the Tribunal directs the appellant to deposit a specific amount within a specified period and stay the recovery of the balance amounts pending the appeal's disposal.

Stay Petition:
The Tribunal addresses three Stay Petitions disposed of by a common order as they arise from the same Order-in-Original. The appellant's request for an adjournment is declined due to previous adjournments granted on similar grounds. The Tribunal proceeds to take up the Stay Petition and the appeal for disposal, emphasizing the need to consider the classification issue and the manufacturing process in detail.

Manufacturing process and Duty liability:
The appellant's counsel highlights the manufacturing process of the product, arguing that it does not constitute manufacturing activity. The appellant asserts a bona fide belief regarding the non-manufacture of their product, supported by the absence of show cause notices to other manufacturers and information obtained through an RTI application. In contrast, the Department points to the recorded manufacturing process to assert duty liability on the manufactured product. The Tribunal carefully considers both arguments and notes the uncertainty surrounding the correct classification of the product.

Interpretation of rules and HSN explanatory note:
In analyzing the issue of product classification, the Tribunal stresses the importance of interpreting the rules and the HSN explanatory note. The Tribunal recognizes the need to consider these rules for a comprehensive understanding of the product's classification. The decision to direct the appellant to deposit a specific amount is made in light of the contentious nature of the classification issue and the requirement to apply the rules of interpretation and the HSN explanatory note for a fair resolution.

This judgment by the Appellate Tribunal CESTAT AHMEDABAD delves into the complex issue of product classification, considering arguments regarding the manufacturing process, duty liability, and the interpretation of rules and the HSN explanatory note. The Tribunal's decision to impose a deposit condition reflects the need for a thorough examination of the classification issue before reaching a final conclusion.

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