1998 (7) TMI 392 - AT - Central Excise

Summary

Issues:
1. Classification of the product Penicillin G Amidase (PGA) Biocatalyst under CET sub-heading 3507.00.
2. Time bar issue regarding the demand for duty amount.
3. Financial hardship plea for waiver of pre-deposit of duty.

Analysis:
1. The issue in this case revolves around the classification of the product PGA Biocatalyst under CET sub-heading 3507.00, attracting a 15% rate of duty. The classification was changed based on expert opinions and comparison with similar products in the market. The appellants contested this classification, arguing that PGA is not a pure isolated enzyme but an immobilized whole cell catalyst. They presented opinions from National Chemical Laboratory and Hindustan Antibiotics supporting their claim. The tribunal noted the conflicting opinions and the doubts raised by the Department itself regarding the correct classification. Therefore, prima facie, the demand for duty for a specific period was considered barred by limitation due to the uncertainty and change of opinion regarding the classification.

2. The time bar issue regarding the demand for duty amount raised for a specific period was a crucial aspect of the case. The tribunal observed that the demand for duty for the period February, 1990 to July, 1994, was beyond the normal period of limitation. The tribunal held that the appellants could not be charged with mis-statement or suppression of facts as the Department itself had doubts about the correct classification. The demand raised beyond the six-month period from the relevant date was deemed barred by limitation. However, the demands raised within the normal period of limitation were to be further scrutinized based on technical and scientific material during the appeal hearing.

3. The appellants pleaded financial hardship, supported by a certificate from a Chartered Accountant reflecting a liquidity crunch. The tribunal considered this plea along with the overall circumstances of the case. They directed the appellants to deposit a specific sum towards the duty demand within a stipulated period, after which the pre-deposit requirement for the balance duty would be dispensed with, and recovery stayed during the appeal's pendency. Failure to comply would result in the vacation of stay and dismissal of appeals without further notice.

In conclusion, the tribunal addressed the classification issue, the time bar issue, and the financial hardship plea comprehensively, providing detailed reasoning for their decision and setting out specific directions for compliance and further proceedings.