1993 (7) TMI 209 - AT - Central Excise

Summary

Issues Involved:
1. Classification of TV signal boosters under Central Excise Tariff Act, 1985.
2. Divergent views between two Collectorates on classification.
3. Entitlement to waiver of pre-deposit of duty and stay of recovery pending appeal.

Issue-wise Detailed Analysis:

1. Classification of TV Signal Boosters under Central Excise Tariff Act, 1985:
The petitioner, a manufacturer of TV signal boosters, argued that their products should be classified under Tariff Heading 85.29, which pertains to "Parts suitable for use solely or principally with the apparatus of heading Nos. 85.25 to 85.28." The Assistant Collector of Central Excise reclassified the goods under Heading 85.43, which covers "Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this Chapter," leading to a demand for differential duty. The petitioner contended that similar goods were classified under Heading 85.29 by the Coimbatore Collectorate.

The Member (Technical) disagreed with the petitioner, stating that TV boosters perform a specific function of boosting signals and are more appropriately classified under Heading 85.43. He noted that no evidence was provided to show that TV boosters are parts of items falling under Headings 85.25 to 85.28, and thus, the classification under Heading 85.43 was deemed correct.

2. Divergent Views Between Two Collectorates on Classification:
The petitioner highlighted that the Coimbatore Collectorate had classified identical goods under Heading 85.29, and this classification was not challenged. The petitioner argued that having two divergent classifications between neighboring Collectorates (Coimbatore and Madurai) was prejudicial and violated the principle of equality under Article 14 of the Constitution of India. The Member (Judicial) agreed with this view, citing the Gujarat High Court's ruling in M/s. Anup Engineering Ltd. v. Union of India, which emphasized the need for uniform interpretation across different states to avoid hardship to manufacturers.

The Member (Technical) countered that the difference in classification between the two Collectorates does not automatically render the Madurai Collectorate's decision erroneous. He emphasized that no evidence was provided to show that the classification under Heading 85.29 was universally applied across India.

3. Entitlement to Waiver of Pre-deposit of Duty and Stay of Recovery Pending Appeal:
The petitioner sought a waiver of the pre-deposit of Rs. 67,308/- and a stay on the recovery of the duty pending appeal. The Member (Judicial) supported this request, stating that the petitioner was entitled to such relief based on the principle of non-discrimination and the balance of convenience, which favored the petitioner. He referenced the Gujarat High Court's decision to support his view.

The Member (Technical) disagreed, arguing that no prima facie case of hardship was made out by the petitioner. He noted that the classification under Heading 85.43 was appropriate and that the petitioner had not demonstrated any significant business impact due to the classification. He cited the Supreme Court's ruling in Asstt. Collector of Central Excise, W.B. v. Dunlop India Ltd., emphasizing that interim relief should not be granted merely because a prima facie case is shown, and public interest should be considered.

Separate Judgments by Judges:
The President, after reviewing the differing opinions, sided with the Member (Judicial). He acknowledged the contentious nature of the classification issue and agreed that the petitioner faced significant business hardship due to the reclassification. He emphasized the importance of uniform interpretation to avoid discrimination and supported the waiver of the pre-deposit and stay of recovery.

Final Order:
In view of the majority decision, the Tribunal granted the waiver of pre-deposit of duty and stayed the recovery of the same pending appeal.