2015 (10) TMI 1632 - AT - Central Excise

Waivef of pre deposit - Classification of goods - Clearance of Silico Manganese slag - Held that - Silico Manganese slag which emerges during the course of manufacture of the final product namely Silico Manganese was proposed to be classified under 2620 99 00 of CETA, 1985. Prima facie, we find force in the submission of the ld. Advocate for the applicant that in view of the Chapter Note 3 of Chapter 26 of the CETA, 1985, the refuse/residue, namely, Silico Manganese slag which are not used for the purpose of extraction of metal or chemical compound would not fall under the scope of the said Tariff Entry. Also, we find that the present demand pertains to the period prior to the amendment of Section 2(d) of Central Excise Act, 1944. In the result, the applicant could able to make out a prima facie case for waiver of pre-deposit of dues adjudged. Accordingly, all dues adjudged is waived and its recovery stayed during the pendency of the appeal. - Stay granted.

Summary

Issues: Application for waiver of pre-deposit of duty and penalty under Section 11AC of the Central Excise Act, 1944 for the clearance of Silico Manganese slag.

Analysis:
1. Classification of Silico Manganese slag: The appellant sought waiver of pre-deposit contending that the product, Silico Manganese slag, emerging during the manufacture of Silico Manganese, should not be classified under Chapter sub-heading 2620 99 00 of CETA, 1985. The advocate argued that the product is a refuse/residue and does not meet the criteria of Chapter Note 3 of Chapter 26 of CETA, 1985 as it is not used for manufacturing chemical compounds of metals. Additionally, the advocate highlighted that the refuse/residue generated during the production of the finished product should not be considered excisable goods, citing the judgment of the Hon'ble Supreme Court in a relevant case. The appellant also mentioned incurring a significant loss in the previous financial year.

2. Revenue's stance and Tribunal's evaluation: The Revenue, represented by the ld. AR, supported the findings of the ld. Commissioner (Appeals). After hearing both sides and examining the records, the Tribunal noted that the Silico Manganese slag, a by-product of Silico Manganese manufacturing, was proposed for classification under 2620 99 00 of CETA, 1985. The Tribunal acknowledged the argument presented by the appellant's advocate regarding Chapter Note 3 of Chapter 26 of CETA, 1985, emphasizing that the refuse/residue like Silico Manganese slag, not used for metal or chemical compound extraction, should not fall under the specified Tariff Entry. Moreover, the Tribunal recognized that the demand in question pertained to a period preceding the amendment of Section 2(d) of the Central Excise Act, 1944. Consequently, the Tribunal found merit in the appellant's case for the waiver of pre-deposit of dues and penalty. As a result, the Tribunal granted the waiver, stayed the recovery of all dues during the appeal's pendency, and allowed the Stay Petition.

In conclusion, the Tribunal's judgment favored the appellant's argument regarding the classification of Silico Manganese slag and the applicability of the Central Excise Act provisions to the case, leading to the waiver of the pre-deposit of dues and penalty, with a stay on recovery during the appeal process.