1998 (12) TMI 281 - AT - Central Excise

Summary

Issues:
Waiver of pre-deposit of Central Excise duty and penalty for the appellant.

Analysis:
The appellant sought waiver of pre-deposit of Central Excise duty and a penalty twice the total amount of duty, amounting to Rs. 20,41,842. The advocate argued that the product, Calcined Pyrophyllite, had been historically classified under Heading 25.05 and the subsequent amendment to the tariff act did not exclude it. The Commissioner had classified the product under Heading 38.16 as refractory cement, which the advocate contested, citing the raw material's dissimilarity to refractory cement. The advocate also raised concerns regarding the time limit specified by Section 11A of the Central Excise Act and emphasized the willingness of the appellant to deposit the confirmed duty amount if a Rule 57E certificate was issued. Reference was made to previous Tribunal cases supporting their argument.

Regarding penalties, the advocate contended that the show cause notices were issued before the enactment of Section 11AC, thus lacking retrospective effect. Additionally, the penalty under Rule 173Q was challenged on the grounds of classification issues and time limit constraints.

The JDR argued against presuming legislative intent based solely on the nil rate of duty amendment, asserting that the product was akin to refractory cement under Heading 38.16. The JDR highlighted that post-calcination, the product transformed into calcined aggregate, aligning with the explanatory notes under Heading 38.16. The advocate countered, stating that the raw material should not be equated with the final product.

The Tribunal acknowledged the classification dispute over Calcined Pyrophyllite and directed the appellant to deposit the duty amount by a specified date, subject to receiving a Rule 57E certificate. The Tribunal stayed the penalty recovery upon duty deposit compliance and instructed the Revenue to issue the necessary certificate. The case was scheduled for compliance reporting.

In conclusion, the judgment addressed the classification issue, pre-deposit waiver request, and penalty concerns, providing a detailed analysis of the arguments presented by both parties and issuing directives for further proceedings.