1998 (1) TMI 194 - AT - Central Excise

Summary

Issues: Application for waiver of duty demand based on classification list, SSI exemption eligibility, and time-barred demand.

Classification List and Duty Demand:
The case involves an application for waiver of duty demand amounting to Rs. 3,74,726.68. The applicants were clearing goods under an approved classification list from 1-4-1995 to 17-8-1995. The adjudicating authority determined the goods to be classifiable under Chapter Heading 7207.10, with an effective duty rate of 10% ad valorem. A subsequent show cause notice alleged that the applicants were not entitled to the benefit of SSI exemption under Notification No. 1/93-C.E., dated 28-2-1993. The BIFR declared the applicants' company as a sick industrial company under the Sick Industrial Companies (Special Provision) Act, 1985. The applicant sought a stay on the duty demand.

SSI Exemption Eligibility:
The respondent argued that the goods were initially cleared under a provisional classification list, and a corrigendum later clarified the duty rate as 10% ad valorem. A demand was raised based on the classification under Chapter Heading 7207.10 and the denial of SSI exemption. The demand was limited to six months from the finalization of the classification list. The respondent requested the dismissal of the application.

Time-Barred Demand:
During the hearing, it was noted that the applicants were clearing goods under approved classification lists without furnishing a bond as required for provisional lists. The classification of goods was revised on 6-12-1995, and a subsequent show cause notice on 19-1-1996 raised the issue of SSI exemption eligibility. The demand was deemed partly time-barred from 6-12-1995. Considering the financial hardship due to the company's sick industrial status, the tribunal waived the total duty amount and stayed the recovery during the appeal process.

Conclusion:
The tribunal found merit in the argument that the goods were cleared under approved classification lists, leading to a redetermination of classification under Chapter Heading 7207.10. The application for waiver of duty demand was partially accepted due to the time-barred nature of the demand and the financial distress caused by the company's sick industrial status. The appeal was scheduled for final hearing at a later date.