1998 (11) TMI 330 - AT - Central Excise

Summary

Issues:
- Waiver of pre-deposit and stay of recovery of Central Excise duty and penalty demand.

Analysis:
1. The appellant, a manufacturer of Ayurvedic medicines, argued that the demand for duty is time-barred as it pertains to a period prior to the issuance of the show cause notice. They highlighted previous orders confirming their products as Ayurvedic medicines, not cosmetics, and the renewal of their drug license. The appellant emphasized that any demand against an approved classification list should be based on valid reasons. They also contended that the impugned products met the criteria for Ayurvedic medicines under the Central Excise Tariff Act.

2. The appellant challenged the imposition of penalty under Section 11AC of the Central Excise Act, citing the retrospective application of the provision and legal precedents. They argued that once a penalty is imposed on a business entity, no further penalty can be levied on its proprietors or partners. The appellant relied on relevant case law to support their arguments against the penalty.

3. The respondent, however, contended that the products in question were cosmetics based on their properties and intended uses. They raised concerns about the ingredients used and the classification of the products as Ayurvedic medicines. The respondent claimed that the appellant had deliberately misstated facts to evade proper duty payment and referenced supporting evidence from investigations and product descriptions.

4. The Tribunal acknowledged the debatable classification of the products and the pending issues regarding the appellant's drug license. While recognizing a prima facie case on the time limit aspect, the Tribunal directed the appellant to deposit a specified amount within a set timeframe. Compliance with this direction would result in the waiver of pre-deposit for the remaining duty and penalty amounts, with recovery stayed during the appeal process. Failure to comply would lead to automatic dismissal of the appeals.

5. The Tribunal's decision balanced the arguments presented by both parties, focusing on the classification of the products, time limits for duty demands, and the need for a deposit to proceed with the appeals. The judgment emphasized the importance of following legal procedures and addressing the specific issues raised by each party while ensuring compliance with regulatory requirements and past precedents.