2000 (7) TMI 339 - AT - Central Excise

Summary

Issues:
Classification of the product under Chapter 5 or Chapter 42; Stay of collection of duty; Pre-deposit amount determination; Modvat credit eligibility; Early hearing of appeals.

Classification Issue:
The case involves a dispute over the classification of a product known as Unsterilized Absorbable Sutures. The appellant argues that the product should be classified under sub-heading 0501, while the department claims it falls under sub-heading 4201.90 of the Tariff. The Commissioner (Appeals) had previously classified the item under sub-heading 0501.00, which the appellant cites in their favor. The Tribunal notes that the twisting process involved in the product aligns with Chapter 42 of the HSN Notes, indicating a possible classification under Chapter 42. Despite the revenue-neutral aspect, the Tribunal emphasizes that the question of classification under either Chapter 5 or Chapter 42 is crucial and not determined by revenue implications. Consequently, the Tribunal directs the assessee to pay a pre-deposit of Rs. 30 lakhs for prosecuting their appeals within 15 days.

Pre-deposit Amount Determination:
During arguments, the appellant's counsel highlights the significant amounts involved in the case, exceeding Rs. 2 crores when considering other show cause notices and appeals. The Tribunal acknowledges the substantial sum and the repetitive nature of the issue, indicating a potential early hearing of the appeals post-compliance with the pre-deposit order. The Tribunal suggests that the Jurisdictional Assistant Collector should consider the admissibility of granting Modvat credit under Rule 57E of the Central Excise Rules, 1944, after the party files a claim for the same and at the time of the final hearing. Compliance with the pre-deposit order is required to be reported by a specified date.

Modvat Credit Eligibility:
The Tribunal discusses the potential eligibility of the appellant for Modvat credit under Rule 57E of the Central Excise Rules, 1944, contingent upon the Jurisdictional Assistant Collector's consideration at the time of the final hearing. The Tribunal directs the appellant to pay the pre-deposit amount and file a claim for Modvat credit, with the final decision on the credit to be determined during the final hearing.

Early Hearing of Appeals:
Considering the substantial amounts involved and the repetitive nature of the issue, the Tribunal indicates a possibility of an early hearing for the appeals post-compliance with the pre-deposit order. The appellant is instructed to approach the Tribunal after complying with the pre-deposit requirement for the fixation of an early hearing of the appeals. Compliance with the pre-deposit order is essential for further proceedings.