2012 (7) TMI 537 - AT - Central Excise

Stay Petition - Waiver of pre-deposit - classification of the product - Jelly Confectionary - classification of the product is under Chapter 17 only and correctly demanded the duty and interest - classification confirmed by the lower authorities upheld and uphold the demand of penalty and interest Penalty under Rule 25 of Central Excise Rules, 2002, in our view, the penalty of 25% of the amount of duty liability confirmed by the lower authorities is enough to meet the ends of justice - appeal allowed as regards setting aside the balance amount of penalty

Summary

Issues: Mis-classification of final product - Penalty waiver - Duty liability - Interest - Appeal disposal

In this case, the appellant filed a Stay Petition seeking waiver of pre-deposit of the penalty imposed by the adjudicating authority and upheld by the first appellate authority. The issue revolved around the mis-classification of the final product, Jelly Confectionary, initially classified under Chapter Heading No. 1704 and later reclassified under Chapter 30 as an Ayurvedic medicine. The adjudicating authority confirmed the demand for differential duty, interest, and imposed an equal amount of penalty. The first appellate authority upheld this classification, sustaining the duty demand, interest, and penalty. The appellant had already deposited the entire duty liability, interest, and 25% of the penalty amount. The authorized representative requested leniency, arguing that the penalty amount already paid should be considered sufficient to close the case. The Tribunal upheld the lower authorities' classification of the product under Chapter 17, rejecting the Revenue's appeal. The penalty under Rule 25 of the Central Excise Rules, 2002, was deemed adequate at 25% of the duty liability. Consequently, the Tribunal allowed the appeal to set aside the remaining penalty amount imposed by the adjudicating authority and upheld by the first appellate authority. The appeal was disposed of accordingly.