2008 (6) TMI 478 - AT - Central Excise

Summary

Issues: Classification of products under different chapters, waiver of pre-deposit of duty and penalty

In the judgment by the Appellate Tribunal CESTAT, Mumbai, the issue at hand revolved around the classification of products, specifically "Printed Plastic Card with or without lamination, photograph, hologram, embossing and stamping." The dispute arose from the Revenue's claim that the products were initially classified under one chapter heading and later changed to another to benefit from a nil rate of duty. The Revenue supported its argument by citing a visit to the applicant's factory and statements from an employee. However, the applicant's counsel referred to Section Note 2 of Section VII, excluding the applicant's product from the relevant chapter, and presented samples in support. The counsel highlighted precedents like the decision of the Apex Court in Metagraphs Pvt. Ltd. v. CCE, Bombay and the Tribunal's decision in CCE, Aurangabad v. Adhunik Plastic Inds. to strengthen the case.

Upon examining Section Note 2 of Section VII, the Tribunal found that the applicant's product fell outside the scope of the chapter initially claimed by the Revenue. The section specifically excluded articles of plastic printed with certain elements from that chapter, indicating that the correct classification for such products would be under Chapter 49. Consequently, the Tribunal concluded that the applicant's product aligned with Chapter 49 based on the provided evidence and arguments. As a result, the Tribunal acknowledged that the applicant had established a prima facie case for the waiver of pre-deposit of the duty and penalty amounts in question. Therefore, the Tribunal allowed the application for the waiver and stayed the recovery of the said amounts until the appeal's final disposal. The decision was dictated and pronounced in open court, providing clarity on the classification issue and the relief granted regarding the pre-deposit of duty and penalty.