2016 (11) TMI 982 - AT - Customs

Classification of imported goods - coal - classified as bituminous coal under tariff entry 2701 12 00 or as steam coal under tariff entry 2701 19 20? - Held that - We find that the High Court decision in the case of BMM Ispat Ltd., Gandhar Oil Refinery (I) Ltd., Gupta Coal India Pvt Ltd, Finolex Industries Ltd Versus The Commissioner of Customs, Central Excise & Service Tax and Others 2015 (11) TMI 1228 - BOMBAY HIGH COURT are squarely applicable to the present petition, where it was held that there are rival contentions and equally differing views of the Benches of the Tribunal, then, all the more this was not a case for imposition of any condition of pre-deposit. The waiver application should have been granted without imposing any conditions. If the Larger Bench of the Tribunal is to resolve the matter, then all the more, without expressing any opinion on the merits of the controversy, so also on the point whether mere reference to Larger Bench should necessarily result in total waiver and unconditional stay, we are of the view that interest of justice will be served if each of these appeals are allowed. The impugned orders of the Tribunal are quashed and set aside. There will be an unconditional waiver of the requirement of pre-deposit. The condition in that behalf need not be adhered to. There will be an unconditional stay of the recovery of tax pending appeals. Further, recently this Bench in the case of Steel Exchange India Ltd and Others Versus C.C., Visakhapatnam 2016 (11) TMI 218 - CESTAT HYDERABAD has granted full waiver of pre-deposit on identical matters. We do not find any ground to take a different view in the present case. Following the same, we grant the appellant full waiver of predeposit. The appeal is to be listed for final hearing in due course.

Summary

Issues:
1. Classification of imported coal under tariff entries.
2. Granting of stay application based on precedents and references to Larger Bench.
3. Discretion to dispense with pre-deposit of duty and interest.
4. Applicability of High Court decisions on granting waiver of pre-deposit.
5. Decision on full waiver of pre-deposit in the present case.

Analysis:
1. The appellant filed a stay application against an Order-in-Original confirming duty demand, interest, and penalty for misclassification of imported coal. The dispute revolved around whether the coal should be classified as bituminous coal or steam coal under specific tariff entries. The Department argued that the coal met the criteria for bituminous coal under Chapter 27, leading to the duty demand under a particular tariff entry.

2. The appellant cited various cases where full stay was granted by different High Courts and Tribunals due to the issue pending before a Larger Bench. The Tribunal noted inconsistency in its own orders on the same issue and referred the matter to a Larger Bench for resolution, as seen in the case of Tamil Nadu Generation & Distribution Corporation Ltd. vs. CC, Tuticorin. The Tribunal acknowledged the relevance of High Court decisions in similar matters.

3. The High Courts of Mumbai, Madras, and Gujarat provided guidance on the discretion to waive pre-deposit of duty and interest. The courts emphasized the need to consider undue hardship and a prima facie case in granting waivers. The courts highlighted the importance of following precedents and conventions in granting total waiver when matters are referred to a Larger Bench.

4. The High Court decisions influenced the Tribunal's decision to grant full waiver of pre-deposit in the present case, aligning with previous decisions on similar matters. The Tribunal emphasized consistency in its approach and cited a recent case where full waiver was granted on identical issues. The Tribunal decided to list the appeal for final hearing without requiring pre-deposit.

5. The Tribunal's decision to grant full waiver of pre-deposit was based on the principles established by the High Court decisions and the Tribunal's own precedents. The Tribunal followed the guidance provided by the courts and maintained consistency in its approach to granting waivers in cases pending before a Larger Bench. The decision reflected the importance of upholding fairness and procedural standards in tax matters.