1999 (9) TMI 196 - AT - Central Excise

Summary

Issues: Classification under Notification No. 87/89-C.E., waiver of pre-deposit of duty, stay of recovery

Classification under Notification No. 87/89-C.E.: The assessees manufactured televisions classifiable under Heading 8528.00 and claimed the benefit of a concessional rate prescribed under serial No. 18 of Notification No. 87/89-C.E. The show cause notice was issued seeking denial of the benefit, stating that certain features of the television receivers turned them into complex machines capable of multiple functions. The Asstt. Commissioner and the ld. Commissioner (Appeals) upheld this denial, emphasizing that a television receiver with unlisted facilities would not qualify for the notification's benefit. However, the Tribunal found that the contested goods were correctly classified under Entry No. 18 of the notification. The Tribunal noted that the additional features, such as a separate keyboard, did not change the basic function of the machine as a television receiver, aligning with a previous Tribunal decision extending the notification's benefit despite additional functions.

Waiver of pre-deposit of duty and stay of recovery: Following the finalization of provisional assessment and the raising of a demand of Rs. 34,04,492/-, the assessees appealed against the order and sought waiver of pre-deposit of the duty and stay of its recovery. The Tribunal, after considering the tariff entry and the description of eligible items in the notification, observed that the revenue did not contest the classification of television sets with computer features under the parent entry for television receivers. The Tribunal noted that the distinction for the benefit of the notification was based on the existence of additional features, which did not alter the fundamental function of the machine as a television receiver. Consequently, the Tribunal granted unconditional waiver of the pre-deposit of the duty demanded and stayed its recovery, finding that the applicants had presented a strong prima facie case.

This judgment from the Appellate Tribunal CEGAT, Mumbai, addressed the issues of classification under Notification No. 87/89-C.E. and the request for waiver of pre-deposit of duty and stay of recovery. The Tribunal analyzed the classification of television receivers with additional features, emphasizing that the basic function as a television receiver remained unchanged despite the incorporation of extra functionalities. The decision highlighted the importance of aligning the product's features with the wording of the notification for determining eligibility for concessional rates. Ultimately, the Tribunal granted the waiver and stay, recognizing the assessees' strong case based on the interpretation of the notification and relevant precedents.