1998 (6) TMI 249 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty and imposition of penalty by the Commissioner of Central Excise.
2. Classification of the intermediate product as "Bituminous Solution" under Chapter Heading 2715.90.
3. Arguments regarding the method of manufacture and composition of the intermediate product.
4. Lack of chemical analysis and invocation of extended period of limitation.
5. Financial crisis faced by the appellants and absence of evidence regarding their financial position.

Analysis:

1. The Commissioner of Central Excise confirmed a duty of Rs. 17,90,429 and imposed a penalty of Rs. 1,80,000 on the appellants. The issue at hand involves the legality of these actions taken by the Commissioner.

2. The main contention revolves around the classification of the intermediate product as "Bituminous Solution" under Chapter Heading 2715.90. The appellant argues that the composition and method of manufacture of this product differ from the golden guine black solution, which is classified under the same heading.

3. The appellant, through their consultant, contends that the intermediate product is not similar to the golden guine black solution as alleged by the adjudicating authority. They argue that the method of manufacture for both products is distinct. The absence of chemical analysis on the product is highlighted, and it is claimed that the findings are not based on any scientific evidence.

4. The invocation of the extended period of limitation is challenged by the appellant, stating that the emergence of the solution in the intermediate stage was known to the department. Additionally, the lack of classification or price lists is explained by the appellants due to the non-excisable nature of the product at the intermediate stage.

5. The financial crisis faced by the appellants is raised as a concern, with the consultant failing to provide evidence of their poor financial position. The lack of current balance sheets or financial documentation is noted.

In the judgment, the tribunal considered the arguments from both sides. It acknowledged the arguable nature of the issue on merits and limitation. However, noting the absence of evidence regarding the poor financial position of the appellants, the tribunal directed them to deposit Rs. 4 lakhs within twelve weeks. Upon this deposit, the remaining duty and penalty were waived, and the Revenue was barred from recovery during the appeal's pendency. Compliance was scheduled for a future date to assess the deposit.