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TMI Blog2009 (5) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... L Pandey, Head Operations of the appellant-company. 3. Since common questions of law and facts arise in both these applications, they were heard together and are being disposed of by this common order. 4. We were actually inclined to dispose of the appeals on merits, however, learned Advocate for the appellants stated that he would like to argue the appeals on the basis of various reported decisions in support of his contentions and therefore, today only the stay applications be disposed of. We are therefore constrained to defer disposal of the appeals. While dealing with the application for stay, as both the parties have addressed us on the point of classification, it would necessary to deal with the same for the purpose of ascertaining whether the appellants have made out prima facie case for the grant of stay. 5. The dispute in the matter relates to classification of excisable product. According to the Department the product is classifiable under chapter 8536.90.90 of the tariff, while it is the contention of the appellants that it falls under Heading 4810.39.20 and 4805.93.00. The authorities below have classified the product being covered by the entry 8546.90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve already deposited Rs. 7,50,000/- by the appellants firm and Rs. 20,000/- by the individual appellant in terms of the Commissioner (Appeals) order in relation to the product manufactured at Sonepat when the Department itself in earlier years in respect to the same product manufactured from the appellants' factory situated in Karnataka had accepted the classification as claimed by the appellants. In that connection attention was sought to be drawn to the orders dated 25th June, 1991 passed by the Collector, Bangalore in Appeal No. 118/91, dated 18th June, 1991, by Assistant Collector of Central Excise, Mysore and order-in-original dated 29th March, 2004 by the Additional Commissioner of Central Excise, Mysore. Further, placing reliance in the decision of the Apex Court in the case of Damodar J. Malpani v. Collector of Central Excise reported in 2002 (146) E.L.T. 483 (S.C.), Mallur Siddeswara Spinning Mills (P) Ltd. v. C.C.E., Coimbatore reported in 2004 (166) E.L.T. 154 (S.C.), Marsons Fan Industries v. Commissioner of C.Ex., Calcutta reported in 2008 (225) E.L.T. 334 (S.C.) and unreported decision of the Apex Court in M/s. Unipatch Rubber Ltd. v. C.C.E., Bhopal in Civil Appeal No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td., reported in 2008 (231) E.L.T. 207 (S.C.), C.K. Gangadharan v. Commissioner of Income Tax, Cochin reported in 2008 (228) E.L.T. 497 (S.C.), Commr. of C.Ex. & Cus., Aurangabad v. Greaves Cotton Ltd., reported in 2008 (225) E.L.T. 198 (Bom.) and Commissioner of Service Tax, Chennai v. Lumax Samlip Indus. Ltd., reported in 2007 (8) S.T.R. 113 (Mad.) submitted that there is no bar for the Department to take a view different from the one taken in the earlier matter of the same assessee in case of classification of the product manufactured by such assessee whenever such a different view is warranted by the facts of that case. He further submitted that the nature of the product manufactured by the appellants clearly justifies the classification thereof under sub-heading 8546. He also drew our attention to the undisputed finding arrived at by the authorities below to the effect that the goods manufactured by the appellants have to undergo fourteen tests in order to acquire the essential character of the final products i.e. insulator paper boards, and therefore the same cannot be considered as the products classifiable under sub-heading 4805. Referring to the chapter Note 3 of the Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essees in relation to the same product manufactured by them and in the absence of such explanation, the view once taken in relation to the classification of such product would prevail unless there are sufficient reasons to take a different view. 13. In Mallur Siddeswara Spinning Mills (P) Ltd. case, while dealing with the similar issue after taking note of earlier decisions of the Apex Court in Damodar J. Malpani as well as in the case of Steel Authority of India v. Collector of Customs, Bombay reported in 2000 (115) E.L.T. 42 (S.C.), it was observed thus - "To these principles there can be no dispute. However, except for making a general statement that nobody else has paid duty, no particulars or details are given. On the contrary, it has been pointed out to us that the Department had issued a show cause notice to another party also in respect of a generator set assembled and installed in their factory. However, in that case the Tribunal concluded that the longer period of limitation was not available and set aside the demand. Had the Appellants pointed out details of the other parties who been allowed, according to the Appellants, to install a generating set the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the product manufactured by the appellant was subjected to any test, as has been done in the case in hand by the adjudicating authority before arriving at the finding that the paperboard manufactured by the appellants has to go through fourteen tests before acquiring the character of final product i.e. insulation paperboard, and secondly that the product is sold in the market as the electrical grade insulation board. That apart, none of the decisions are on the point as to whether the department is entitled to take view different from the one taken in the earlier matter which had been confirmed only up to the stage of Commissioner (Appeals) and not beyond that. In this regard, the decisions sought to be relied upon by the learned DR are certainly of great importance. 17. In C.K. Gangadharan case the matter was referred to the Larger Bench of the Apex Court for the decision on the point as to whether the Revenue is precluded from taking view different from the one taken by it earlier merely because the earlier view was not challenged before higher authorities. In that connection the Apex Court noted the decision in Bharat Sanchar Nigam Ltd. and Anr. v. Union of India a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of U.P. v. Union of India [2003 (3) SCC 239] related to the year 1988. Admittedly, the present dispute relates to a subsequent period. Here a coordinate Bench has referred the matter to a Larger Bench. This Bench being of superior strength, we can, if we so find, declare that the earlier decision does not represent the law. None of the decisions cited by the State of U.P. are authorities for the proposition that we cannot, in the circumstances of this case, do so. This preliminary objection of the State of U.P. is therefore rejected". [Emphasis supplied]. 18. It was further ruled therein that- "we hold that merely because in some cases the revenue has not preferred appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 4803 otherwise requires, these headings do not apply to paper, paperboard, cellulose wadding or webs of cellulose fibres which have been otherwise processed". 20.2 The sub-heading 4810 39 10 speaks of "Insulating paper" and subheading 4810 39 20 speaks of "Electric insulating press board". 20.3 The sub-heading 8546 reads as "Electrical insulators of any material". 20.4 Plain reading of the above entries along with Note 3 would reveal that sub-heading 8546 forms part of the Chapter 85 which deals the subject of Electrical insulators of any material and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles. 20.5 As against the same, the sub-heading under Chapter 48 relates to paper and paperboard; articles of paper pulp of paper or of paperboard. 21. If one analyses the sub-heading 4805, undoubtedly one has to read the same along with Note 3. The Note 3 specifically provides the processes which the product should undergo in order to claim classification under the said subheading. It is the contention on behalf of the appellants that it is the calan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause Chapter 70 refers to the exclusion of electrical insulators of any material and no such exclusion is made under Chapter 48 notes, that cannot lead to a conclusion that such product would essentially be classifiable under Chapter 48. The classification of a product has necessarily to be decided on the basis of the nature of the product and as is understood in common parlance. Certainly the notes to the chapter are also guiding factors and the applicability thereof will have to be decided in the facts situation in relation to the each of products. Considering the same and for the reasons recorded above, prima facie, we find it difficult to accept the contention on behalf of the appellants regarding the classification of the product manufactured by the appellants. 24. In this regard, reliance in the decision in the matter of Bakelite Hylam Ltd., (supra) case and Senapathy Symons Insulations (P) Ltd., case is certainly justified. In the Bakelite Hylam Ltd., case it was held - "28. Industrial laminated sheets which are paper-based are used for electrical insulation. Glass epoxy laminates are also used as electrical insulators. The New Tariff Act contains a separate Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 8546.00 is totally justified and is required to be confirmed". [Emphasis supplied]
26. In the facts and circumstances of the case, therefore, we do not find any case having been made out for the grant of stay of the impugned order. As the appellants have already deposited Rs. 7,50,000/- by the company and Rs. 20,000/- by the individual-appellant, the balance need to be deposited. The question of grant of stay in relation to demand of duty and interest does not arise. However, as the dispute relates to the classification of the product, a case for stay of demand for penalty is made out.
27. The applications therefore to the extent they relate to the stay of the penalty are allowed. Applications for stay of demand of duty and the interest amount are dismissed. The amount of duty and interest due in terms of the impugned order, after deducting the payment, if any, already made, should be deposited by the appellants within twelve weeks. The period of 12 weeks has been fixed at the request of learned Advocate for the appellants. For compliance report on 26-8-2009. X X X X Extracts X X X X X X X X Extracts X X X X
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