1994 (11) TMI 216 - AT - Central Excise

Issues Involved:
1. Waiver of predeposit of duty and penalty.
2. Classification of goods under Heading 59.06.
3. Allegation of suppression of facts by the petitioner.
4. Financial hardship claimed by the petitioner.
5. Computation of duty.

Issue-wise Detailed Analysis:

1. Waiver of Predeposit of Duty and Penalty:
The petitioner sought a waiver of predeposit for a total duty amount of Rs. 64,67,092.77 and a penalty of Rs. 5,45,000/- levied under the impugned order dated 14-12-1993. The Tribunal considered the financial hardship claimed by the petitioner, who cited a meager profit of Rs. 78,000/- for the year ending 31st March 1993, and the balance sheet reflecting the financial position. The Tribunal directed the petitioner to deposit Rs. 15 lakhs and granted a waiver for the balance amount of duty and the entire penalty, pending the appeal's disposal.

2. Classification of Goods under Heading 59.06:
The petitioner argued that the goods (wax-treated cotton canvas cloth) should not be classified under Heading 59.06, which pertains to fabrics where impregnation, coating, or covering is visible to the naked eye. The department's initial classification was based on the opinion of the Dy. Chief Chemist, who stated that the coating/impregnation was visible. However, the Chief Chemist's subsequent opinion indicated that the interstices between the yarns were not completely filled, and light passed through them, suggesting that the goods might not fall under Heading 59.06. The petitioner also referenced similar cases where goods were not classified under Heading 59.06, arguing for consistent treatment and non-discrimination.

3. Allegation of Suppression of Facts by the Petitioner:
The department alleged that the petitioner was guilty of suppressing facts, as no classification list or price list was filed, nor was any license taken out. The petitioner did not reply to the show cause notice, which the department used to support its claim of suppression. The Tribunal noted this contention but reserved its final judgment on this issue for the appeal's merits.

4. Financial Hardship Claimed by the Petitioner:
The petitioner claimed financial hardship, supported by the balance sheet for the year ending 31st March 1993, showing limited profits and a partnership structure. The Tribunal considered this claim and the balance sheet details, which showed significant assets and liabilities. Based on this, the Tribunal directed a partial deposit of Rs. 15 lakhs, acknowledging the financial hardship while ensuring some compliance with the predeposit requirement.

5. Computation of Duty:
The petitioner contested the computation of the duty, arguing that the total liability, even for the longer period, should only be Rs. 15,21,324/- for the fabrics and Rs. 12,085/- for the Tarpaulin. The department, represented by the SDR, could not verify this computation due to the petitioner's lack of response to the show cause notice. The Tribunal acknowledged this dispute and reserved detailed consideration for the final hearing.

Conclusion:
The Tribunal, after considering the contentious issues and the financial position of the petitioner, directed a partial predeposit and granted a waiver for the balance amount, pending the appeal's final hearing. The classification of goods under Heading 59.06, the allegation of suppression, and the exact computation of duty were reserved for detailed scrutiny during the final appeal hearing. The petitioner was given time until 28th February 1995 to comply with the deposit order, with the next hearing scheduled for 13th March 1995.

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