2016 (11) TMI 218 - AT - Customs

Waiver of pre-dposite - Classification of steam coal - matter is pending before the larger bench - trade parlance theory - to be classified as Bituminous coal under Tariff entry 2701 12 00 or under tariff entry 2701 19 20 - Held that - where some of the appellants have obtained waiver of predeposit which has not been challenged or stayed by higher appellate forum, it would tantamount to undue hardship for the remaining appellants on identical issue if predeposit is insisted upon them. Further, as a Tribunal, this appellate forum is bound to follow the ratio of the judgments laid down by the jurisdictional High Court or if no such judgment is available, of the other High Courts and/or Hon ble Apex Court. This is the judicial discipline that is required of us to follow. This is what the doctrine of stare decisis enjoins us to do. Since our aforesaid decision of 16/05/2016 in Century Textiles case, even the coordinate Bench of the Tribunal at Ahmedabad have, vide their Interim Order No.125-140/2016 dt. 08/06/2016 referred sixteen more appeals on identical issue to the Larger Bench, following their earlier Interim Order No.385 to 505 dt. 07/09/2015. Thus, no new facts have emerged to deviate from the earlier view taken by us in Century Textiles case. Full waiver of pre-deposit granted.

Summary

Issues Involved:
1. Classification of imported coal as Bituminous coal or Steam coal.
2. Eligibility for duty exemption under Notification No. 12/2002-Cus dated 17.03.2012.
3. Conflicting decisions of different CESTAT benches on the classification of coal.
4. Financial difficulties faced by appellants in making pre-deposits.
5. Consistency of granting full stay in cases referred to Larger Bench.

Detailed Analysis:

1. Classification of Imported Coal:
The primary issue in these cases is the classification of imported coal. The department argued that the coal should be classified as Bituminous coal under Tariff entry 2701 12 00, based on its volatile matter and calorific value, as per sub-heading Note 2 of Chapter 27. The appellants, however, contended that the coal should be classified as Steam coal under CTH 2701 19 20, arguing that there is no statutory definition for Steam coal and it should be interpreted in commercial or trade parlance. They asserted that Steam coal is a more specific heading compared to Bituminous coal, which can be either coking or steam coal based on its use.

2. Eligibility for Duty Exemption:
The appellants sought stay of recovery of duty, interest, and penalties, arguing that the denial of duty exemption under Notification No. 12/2002-Cus dated 17.03.2012 was incorrect. They claimed that the imported coal met the conditions for exemption as Steam coal and that the government intended to grant exemption to all coal used as Steam coal. They also cited test reports and opinions from Central Institutes to support their classification as sub-bituminous coal, eligible for exemption.

3. Conflicting CESTAT Decisions:
The appellants highlighted conflicting decisions from different CESTAT benches on the classification of coal. The Bangalore Bench in Coastal Energy Pvt. Limited classified the coal as Bituminous coal, while the Chennai Bench in Tamilnadu Newsprint & Papers Limited classified it as Steam coal. The Chennai Bench referred the matter to a Larger Bench due to these conflicting decisions. The appellants argued that in such cases, full stay should be granted until the Larger Bench resolves the issue.

4. Financial Difficulties for Pre-deposits:
Some appellants cited financial difficulties in making pre-deposits, requesting modification of earlier stay orders. They argued that the Tribunal should grant full waiver of pre-deposit, especially in light of conflicting decisions and references to the Larger Bench. They cited various High Court and Tribunal decisions where full stay was granted in similar situations.

5. Consistency in Granting Full Stay:
The Tribunal noted that different benches had issued inconsistent orders regarding pre-deposit requirements. However, it observed that several High Courts, including Mumbai, Madras, and Gujarat, granted full stay in cases referred to the Larger Bench, emphasizing judicial propriety and the doctrine of stare decisis. The Tribunal reiterated its earlier decision in Century Textiles Ltd., granting full waiver of pre-deposit and stay of recovery until final disposal, respecting the High Court judgments and ensuring consistency.

Conclusion:
The Tribunal granted full waiver of pre-deposit and stay of recovery for all appellants, pending final disposal of the appeals. It emphasized judicial discipline and consistency in handling cases referred to the Larger Bench. The department's application to reject modification of stay was dismissed, and the stay/miscellaneous applications were disposed of on these terms.