2001 (3) TMI 306 - AT - Central Excise

Summary

Issues:
1. Request for waiver of pre-deposit of Central Excise Duty and penalty imposed by the Commissioner Central Excise.
2. Classification of Sweetened Condensed Milk (SCM) in bulk under different sub-headings.
3. Time-barred demand of duty.
4. Interpretation of "unit container" for classification under Sub-heading 0401.14.

Analysis:
1. The appellant, M/s. Nestle India Ltd., sought a waiver of pre-deposit of Central Excise Duty and penalties totaling Rs. 8,87,13,764/- and Rs. 1,60,00,000/- and Rs. 4,51,33,581/- respectively. The Commissioner Central Excise had imposed these amounts under Order Nos. 11-16/2001, dated 31-1-2001.

2. The main contention revolved around the classification of Sweetened Condensed Milk (SCM) by the appellant. The appellant argued that SCM in bulk should be classified under sub-heading 0401.19, attracting a Nil rate of duty. They emphasized that the Tribunal had previously ruled in their favor in a similar case. The Department, however, argued that SCM should be classified under Sub-heading 0401.14 as condensed milk put up in unit containers. The Tribunal acknowledged the complexity of the issue and deferred a final decision pending a regular hearing.

3. Regarding the time-barred demand of duty amounting to Rs. 4,51,33,581/-, the appellant contended that the demand was not valid as they had stopped paying excise duty following a favorable decision by the Collector (Appeals) on 31-3-1992. They argued that the extended time-limit for issuing the show cause notice was not applicable in their case.

4. The interpretation of "unit container" under Sub-heading 0401.14 was a crucial aspect of the case. The appellant argued that the barrels in which they supplied SCM in bulk did not qualify as unit containers as they contained varying quantities and were not intended for retail sale. They relied on previous tribunal decisions to support their position. The Department, however, contended that the barrels were designed to hold a predetermined quantity, meeting the criteria of a unit container as per Note 3 to Chapter 4 of the Tariff.

In conclusion, the Tribunal granted the appellant's request for a waiver of pre-deposit and stay on the recovery of the duty and penalty during the appeal process. The Tribunal found that the appellant had a strong prima facie case, especially considering the previous Tribunal ruling in their favor and the cessation of duty payment following a favorable decision. The matters were scheduled for final hearing in the future.