2014 (10) TMI 85 - AT - Central Excise

Waiver of pre deposit - Classification of goods - Classification under CETH 84.21 or under CETH 84.24 - Held that - From the product-literature produced, it is clear that the filters manufactured by the appellant are mainly used in agricultural/horticultural systems and have no application elsewhere. From the purchase orders available on record, it is seen that the buyers of the goods are manufacturers of irrigation systems, which also indicates that they are used in irrigation systems. These evidences on record confirm the fact that the products would merit classification under CETH 8424 and not under the CETH 8421. The various decisions relied upon by the appellant also support the appellant s case for classification as agricultural/horticultural equipment. In view of the above, we find that the appellant has made out a case to grant of stay. Accordingly, we grant waiver from pre-deposit of the dues adjudged against the appellant and stay recovery during the pendency of the appeal - Stay granted.

Summary

Issues: Classification of filters under Central Excise Tariff Heading (CETH) 84.21 or CETH 84.24, Time-barred demand, Grant of stay petition

Classification under CETH 84.21 or CETH 84.24:
The appeal challenged the Order-in-Appeal upholding the classification of filters under CETH 84.21 by the Commissioner of Central Excise (Appeals). The appellant contended that the filters should be classified under CETH 84.24 as agricultural/horticultural appliances, attracting a Nil rate of duty. The appellant argued that the filters were used in irrigation systems and provided evidence from product literature and purchase orders showing their agricultural use. Referring to HSN Explanatory Notes and Note 4 of Section XVI, the appellant asserted that the filters should be classified under CETH 8424. The appellant also highlighted prior communications with the department regarding their manufacturing activities for agricultural purposes. The appellant relied on tribunal decisions supporting the classification of similar products as agricultural equipment. The tribunal, after considering the submissions, found merit in the appellant's case and granted a waiver from pre-deposit of dues, staying the recovery during the appeal.

Time-barred demand:
The appellant argued that the excise duty demand for the period November 2007 to November 2010 was time-barred as the show-cause notice was issued in February 2011, beyond the normal period of limitation. The appellant emphasized that the department was aware of their manufacturing activities for agricultural filters since 2007, as evidenced by prior communications requesting exemption under Chapter 84. The appellant contended that the delayed show-cause notice rendered a significant portion of the demand time-barred. The tribunal did not delve deeply into the time-barred issue but focused on the classification aspect, ultimately granting the stay petition based on the classification arguments presented.

Grant of stay petition:
The tribunal, after analyzing the product literature, purchase orders, and arguments presented by both parties, concluded that the filters manufactured by the appellant were primarily used in agricultural/horticultural systems, supporting their classification under CETH 8424. The tribunal found the evidence provided by the appellant, along with tribunal decisions cited, compelling enough to grant a waiver from pre-deposit of dues and stay recovery during the pendency of the appeal. The tribunal's decision was based on the agricultural use of the filters and the supporting documentation, aligning with the appellant's classification arguments.

---