1997 (6) TMI 186 - AT - Central Excise

Summary

Issues:
1. Classification of glass and glasswares under Central Excise Tariff headings.
2. Invocation of longer period for demanding duty under Section 11A.
3. Financial hardship faced by the applicants.

Classification of Glass and Glasswares:
The appeal before the Appellate Tribunal CEGAT, Mumbai involved a dispute regarding the classification of glass and glasswares manufactured by the applicants under Central Excise Tariff headings 70.12 and 70.15. The applicants contended that their products should be classified as laboratory glassware falling under the former sub-heading. However, the Commissioner, in the impugned order, classified the products as industrial use items under the latter sub-heading. The authorized representative of the applicants argued that the department could not invoke the longer period for demanding duty under Section 11A as there was no suppression of facts. The Tribunal acknowledged that the classification issue required detailed examination of Tariff Headings, section notes, and chapter notes, which could only be done during the appeal hearing on merits, not at the stay application stage.

Invocation of Longer Period for Demanding Duty:
Regarding the invocation of the longer period for demanding duty under Section 11A, the authorized representative of the applicants highlighted that no facts were suppressed from the department. The Tribunal noted that the demand arose during a routine check of records by the officers, indicating no deliberate concealment. The Tribunal considered the financial condition of the applicants, as evidenced by their 1996 balance sheet, where they reported a loss of over Rs. 58,000. Despite the financial difficulties faced by the applicants, the Tribunal directed a partial pre-deposit of Rs. 11 lakhs for hearing the appeal on merits, dispensing with the pre-deposit of the remaining duty and penalty amount, and staying the recovery until the appeal's disposal.

Financial Hardship Faced by the Applicants:
The financial hardship faced by the applicants was a crucial aspect considered by the Tribunal in its decision. The applicants' authorized representative emphasized the undue hardship that would result from the pre-deposit of duty and penalty, pointing out the loss incurred by the applicants and the substantial amount due from sundry debtors. The Tribunal took into account the financial data provided, including a sales turnover of Rs. One crore in 1994, and balanced the need for pre-deposit with the applicants' financial situation. The Tribunal's decision aimed to ensure a fair opportunity for the applicants to present their case on appeal while also addressing their financial constraints.