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TMI Blog2002 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... r Proviso Second to Rule II of Chapter XXII of Allahabad High Court Rules. 4.The brief facts necessary for adjudication of the writ petition are that the petitioner is a company registered under the Companies Act, 1956 engaged in the manufacture of "Complan and Glucon D" for which the basic ingredients as claimed by the petitioner are as below (a) Skimmed milk powder (b) Sugar (c) Vegetable oil containing permitted and oxidants (d) Malto-Dextrin Powder (e) Minerals (f) Vitamins (g) Flavours. From 1st October, 1994, the petitioner, had been paying Central Excise Duty and the petitioner filed a declaration under Rule 173B of the Central Excise Rules, 1944 called 'Rules' hereinafter claiming classifications of Complan under Heading 2107.91 of the Tariff approved by the Central Excise Department however, the classification was changed subsequently to 2108.99 of the Tariff. 5.A show cause notice dated 29th November, 2000 was issued to the petitioner by the Superintendent, Central Excise Range, Aligarh wherein proposing to classify 'Complan' under Heading 1901.92 of the Tariff and demanding differential Central Excise Duty for the month of November, 1999. The show cause emphasised th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally covers 'Malto Dextrin' (Dextri-Maltoses) under the category of other sugar and defines Malto Dextrin as under : "Malto Dextrins (or dextri Maltoses) obtained by the same process as Commercial glucose. They contain maltose and polysaccharides in variable proportions. However, they are less hydrolysed and therefore have a lower reducing sugar content than commercial glucose. The heading covers only such products with a reducing sugar content, expressed as dextrose on the dry substance, exceeding 10 per cent fall in Heading 35.05. Malto Dextrin are generally in the form of white powders, but they are also marketed in the form of a syrup [See Part (b)]. They are used cheaply in the manufacture of baby food and low-caloric dietetic foods, as extenders for flavouring substances or food colouring agents, and in the pharmaceutical industry as carriers." 8.Thus, Malto Dextrin otherwise known as dextrin maltoses is understood and classified as sugar under Heading 17.02 by the H.S.N. 9.It has also been contended on behalf of the petitioner that Malt extract is defined under Heading 19.01 of H.S.N. Explanatory Notes as under : "Malt Extract are made by concentrating the solution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into consideration by the appellate forum while it is to decide the question whether the deposit has to be dispensed with or not. 13.In 1990 U.P.T.C. 321, M/s. Matsushita Television Audio Ltd., India v. Commissioner (Appeals), Customs and Central Excise, Noida, while dealing Rule 57G Central Excise Rules, 1944 in respect of Modvat claimed, the Adjudication Officer issued show cause notice and after obtaining objection claimed of Modvat was disallowed and appeal with stay application preferred against such order, the Appellate Authority was pleased to pass stay in part and condition of pre-deposit of the waived in port. Since Section 129E of Customs Act is identical to Section 35F of Central Excise Act, therefore, High Court directed to the Appellate Authority to re-hear and dispose of the stay application. 14.It was held in Para 9 of M/s. Matshusita Television (supra) that there would not be any dispute about legal proposition that the Appellate Authority while considering an application under proviso in Rule 35F should take a realistic view of the matter in determining whether the prayer for dispensation of pre-condition of deposit of the amount required to be deposited should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been filed with the present petition. Only this much was stated that petitioner herein is also willing to get on the photo copy of the exchange control copy of its Bill of Entry produced by it before the department and to furnish an indemnity bond (copy already enclosed) for the amount of credit in question. 17.In 1999 U.P.T.C. 423, M/s. Kaushal Industries, Agra v. Commissioner (Appeals), Customs and Central Excise, Ghaziabad, it was held in reference to Section 35F, Central Excises and Salt Act, 1944, that prima facie case on merits and the financial condition to be looked into and decide the application for waiver and stay. 18.In 1998 (104) E.L.T. 330 (Cal.), Ruby Rubber Industries v. Commissioner of Central Excise, Calcutta-II, while dealing the stay dispensation of pre-deposit the work prima facie case and its meaning was elaborated and Calcutta High Court has indicated that it is now well settled through judicial precedence that prima facie case is a relevant factor for deciding the question of undue hardship. It is also well settled similarly prima facie case does not necessarily mean that one must have (sick) edges case which is bound to succeed where as the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case was not considered and therefore, order is not sustainable, more so without keeping in mind the financial difficulties of the petitioner, the above order has been passed. 23.I have gone through the facts and pleadings of the writ petition, I find that the above order is not speaking order. The Commissioner has not considered the appeal of the petitioner on merits of the case, therefore, the judgment referred above are protecting the cause of the petitioner. Therefore, the order of Commissioner, Excise is liable to set aside and Commissioner is directed to reconsider the entire question under Section 35F of the Act upon the prayer of the petitioner for dispending with the requirement of deposit of the amount in question and after hearing the parties in question on merits and in the light of the observations made above and the law on the subject to pass, afresh order. Till the respondent No. 2 considers and disposes of afresh the petitioner's application for dispensation with the deposit, the recovery of the amount demanded shall stay and thereafter the order that the Commissioner passes shall take effect. The respondent No. 2 shall very expeditiously dispose of the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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