1999 (10) TMI 233 - AT - Central Excise

Summary

Issues: Waiver of pre-deposit condition, classification of product, limitation period for show cause notice, natural justice denial

The judgment by the Appellate Tribunal CEGAT, Mumbai pertained to an application seeking waiver of a pre-deposit condition of Rs. 1,31,48,893/- confirmed as duty and penalty, along with a stay of recovery during the appeal. The applicants had manufactured a product named creasmer and claimed its classification under sub-heading 3403.00 of CETA. The dispute arose when the chemical authorities suggested a different classification under sub-heading 3402.90, leading to a show cause notice for duty demand and penalty imposition. The appeal challenged this decision, focusing on merits, natural justice, and limitation issues. The Tribunal noted the delay in issuing the show cause notice after receiving the chemical opinion and referenced a previous judgment on limitation. However, the Tribunal refrained from relying on it as the issue was referred to a Larger Bench. The Tribunal highlighted the requirement for the Assistant Commissioner to verify and approve classifications claimed by assesses before granting approval, emphasizing the importance of following due process. Additionally, the Tribunal mentioned a previous show cause notice issued on similar grounds, indicating a pattern of departmental actions. Ultimately, the Tribunal found a strong prima facie case on the limitation issue and noted the denial of natural justice by not providing the complete test report to the assesses. Consequently, the Tribunal granted an unconditional stay and waiver of the demand and penalties imposed, based on these observations.