NIRMALA DYE CHEM Vs. CCE DAMAN

JUDGEMENT

(1.) THE present application has been filed for modification of Stay Order No. S/129/WZB/AHD/2011, dt.1.3.11, vide which the Appellant was directed to deposit entire duty of Rs. 17,22,720/ - (Rupees Seventeen Lakhs, Twenty Two Thousands, Seven Hundreds and Twenty Only), after observing that the dispute in respect of classification stand decided against the Appellant by Tribunal's Order No. A/187/WZB/AHD/2011, dt.25.01.11. The said Stay Order was passed in the absence of the Appellant, after rejecting the adjournment request. The dispute involved is as regards correct classification of their various products. Whereas, the Appellants have claimed the classification under Heading 38.08, Revenue's contention was that the products are correctly classifiable under Heading 34.02.

(2.) LD . Advocate Shri J.C. Patel, appearing for the applicant submits that even if Revenue's stand as regards correct classification under Heading 34.02 as upheld by the Tribunal in their own earlier matter, is accepted, the differential duty arose on account of the fact that the Chapter 34 was a specified chapter in terms of notification issued under Section 4A. He submits that the notification, relevant during the period, i.e. Notification No. 13/2002 -CE(NT) dt.1.3.02 was subsequently amended vide Notification No. 2/2006 -CE, dt.1.3.06. By drawing our attention to the relevant entries in the said notification, he submit that in terms of earlier Sr. No. 36 of Notification No. 13/2002 -CE, all goods falling under Headings 3401.20 and 3402.90 were exempted under MRP based valuation. In the subsequent notification issued on 1.3.06, Sr. No. 40 refers to Heading 3401 11, 3401 19 and 3402. However, the description of the goods was restricted to Organic surface active products and preparations for use as soap in the form of bars, cakes, moulded pieces or shapes. He submits that inasmuch as their product is in liquid form, the same does not fit into the description of the goods appearing against Sr. No. 40 of notification issued under Section 4A of Central Excise Act. As such, w.e.f. 1.3.06, the differential duty on account of applicability of Section 4A would not arise, inasmuch as they have already discharged the duty on their product on the assessable value arrived at in terms of provisions of Section 4A and rate of duty being the same, under the two contending entries. He submits that the period involved in the present appeal is from February 2003 to July 2004 and May 2006 to February 2007. As such, he submits that the earlier Tribunal's order would cover the period February 2003 to July 2004, covering the duty to the extent of Rs. 2,91,948/ -(Rupees Two Lakhs, Ninety One Thousands, Nine Hundreds and Forty Eight Only), which stand deposited by them. For the period from May 2006 to February 2007, since the Chapter Heading 34.02 under which their products have been held to be falling, was not covered by notification issued under Section 4A, no duty liability would arise against them. As such, on the above ground, he prays for modification of the said Stay Order.

(3.) AFTER considering the submissions made by both sides, we, prima facie, agree with the ld. Advocate that in the subsequent Notification No. 2/2006(NT), dt.1.3.06, the Organic surface active products and preparations for use as soap, were included in MRP value only if the same were in the form of bars, cakes, moulded pieces or shapes . The above description, prima facie, excludes Organic surface active products and preparations from assessment under Section 4A, since the same are in liquid form. Admittedly, the Appellant's products are in liquid form. As such, we agree with the ld. Advocate that after 1.3.06, the differential duty may not arise against them inasmuch as Chapter 34, 38 attracted duty in terms of Section 4, which already stand discharged by them. The duty for the period prior to 1.3.06 stand deposited by the Appellant. As such, we modify our earlier Stay Order and dispense with the condition of pre -deposit of balance amount of duty.