2006 (10) TMI 164 - HC - Central Excise

Summary

Issues:
1. Interpretation of Section 35F of the Central Excise Act regarding pre-deposit during the pendency of an appeal.
2. Disallowance of Cenvat credit on mixer grinders by the second respondent and imposition of a penalty.
3. Allegation of mis-declaration by the petitioner company regarding the classification of mixer grinders as parts of refrigerators.
4. Application of Circular dated 28-10-2002 in determining the duty payment under Section 4A of the Central Excise Act.
5. Comparison with a similar case from the High Court of Delhi regarding pre-deposit under Section 35F.

Analysis:
1. The case involved a writ petition arising from an interim order directing the petitioner to pre-deposit a sum during the appeal under Section 35F of the Central Excise Act. The petitioner, a manufacturing company, contested the order which required pre-deposit of Rs. 17,00,000/-.
2. The second respondent disallowed Cenvat credit on mixer grinders, alleging misclassification by the petitioner. The penalty was imposed under Rule 13 of the Cenvat Credit Rules, 2001, leading to the appeal and subsequent interim order for pre-deposit.
3. The petitioner argued that the mixer grinders were correctly classified based on the Circular dated 28-10-2002, which allowed duty payment under Section 4A if items in a multi-pack were not intended for separate sale. The petitioner claimed the allegation of mis-declaration was unfounded.
4. The respondents contended that the mixer grinders were wrongly classified as parts of refrigerators, and the Circular could not justify the classification. They argued that the first respondent's order for pre-deposit was lawful and in accordance with the mis-declaration by the petitioner.
5. The Court referred to a similar case from the High Court of Delhi regarding pre-deposit under Section 35F, where a waiver of 50% of the duty amount was deemed sufficient. The petitioner's appeal to the Supreme Court was dismissed, upholding the pre-deposit requirement. The Court found the Delhi Court's decision applicable and upheld the first respondent's interim order, dismissing the writ petition and granting eight weeks for pre-depositing the duty amount.