1998 (2) TMI 335 - AT - Central Excise

Summary

Issues:
1. Application for waiver of pre-deposit of duty and penalty and stay of recovery arising from finalization of provisional assessment of white cement.
2. Classification issue of the product under CET sub-headings 2502.20 and 2502.90.
3. Financial hardship faced by the appellant.
4. Appeal for waiver of pre-deposit and penalty.

Analysis:

1. The judgment pertains to an application for waiver of pre-deposit of duty and penalty, stemming from the finalization of provisional assessment of white cement by the Commissioner of Central Excise, Jaipur. The appellants initially filed a revised classification list seeking to classify the product as 'Rapid Hardening Portland Cement (White)' under CET Heading 2502.20. This led to a series of legal actions, including a writ petition before the Rajasthan High Court and subsequent orders for provisional payment of duty under sub-heading 2502.20. The dispute escalated, resulting in detention of goods by departmental authorities, and the final classification was determined under sub-heading 2502.90, leading to the current demand.

2. The appellant's consultant argued that the classification issue was pending before the Tribunal and the Supreme Court in similar cases, suggesting that the authorities should have awaited the final decision before confirming the duty demand. The consultant also highlighted the financial distress faced by the appellant, including the closure of the company and enforcement of bank guarantees. Despite the appellant's plea for waiver of pre-deposit, the Departmental Representative contended that the Commissioner rightly confirmed the duty based on the High Court's direction and the financial capability of the appellant.

3. The Tribunal considered both parties' submissions and noted that the demand arose from the finalization of classification under sub-heading 2502.90. While acknowledging the pending classification appeal before the Tribunal, the Tribunal found that the appellant failed to establish a prima facie case for waiver based on the merits of the classification issue. Regarding financial hardship, the Tribunal observed the appellant's application to the Board for Industrial and Financial Reconstruction (BIFR) as a sick unit, indicating financial instability. Consequently, the Tribunal directed the appellant to deposit a specified sum within a set timeframe, with the waiver of the balance duty and penalty contingent on compliance.

4. In conclusion, the Tribunal ordered the appellant to deposit a sum of Rs. 15 lakhs within 12 weeks, failing which the stay would be vacated, and the appeal dismissed. The judgment balanced the interests of justice with the financial circumstances of the appellant, ensuring compliance while addressing the classification and financial challenges faced by the appellant.