MEERA CHEMICAL INDUSTRIES Vs. COMMISSIONER OF C EX.

JUDGEMENT

(1.) THESE are two applications for waiver of pre -deposit of Central Excise duty amounting to Rs. 20,41,8427 -and a penalty twice the total amount of duty.

(2.) SHRI V. Sridharan, ld. Advocate submitted that after mining of pyrophyllite, the same is being calcined by them and sold mainly to M/s. Associated Cement Company Heading 25.05 of the Schedule to the Central Excise Tariff Act was amended with effect from 26 -5 -1995 and all the sub -headings were ommitted and rate of duty in the Tariff itself was prescribed as nil. He submitted that earlier all the products falling under Heading 25.05 were exempted from payment of duty under Notification No. 7/92, dated 1 -3 -1992 and the legislature instead of providing exemption by the notification provided NIL rate of duty in the Tariff itself. He submitted that the Department is relying on Note 2 to Chapter 25 which provides that except where their context otherwise requires Heading 25.05 would not cover the products that have been roasted, calcined etc. The argument of the ld. Advocate is that right from the beginning the calcined product has been classified under heading 25.05 which is evident from Board's circular F. No. 114/18/86/CX3, dated 24 -3 -1986 in which it was mentioned that calcined magnesite is classified under Heading 25.05. The Heading 25.05 in 1986 and the heading which was substituted in 1995 are identical. In between Heading 2505.10 was applicable earlier. Sub -heading 2505.10 before the amendment of 1995 cover the mineral substance whether or not calcined. He emphasised that merely change or deletion of the sub -heading will not take away the product manufactured by the appellant out of the purview of the Heading 25.05.

(3.) HE further submitted that ld. Commissioner had classified their product under Heading 38.16 which refers to refractory cement by applying the Rule 4 of the Interpretative Rule which provides that the goods which cannot be classified in accordance with the earlier rules, shall be classified under heading appropriated to the goods to which they are most akin. He submitted that the Calcined Pyrophyllite is the raw material for the manufacture of refractory cement and by no stretch of imagination it can be treated as akin of refractory cement. In this regard he referred to the Hand Book of Refractory by Shri D.N. Nandi. Ld. Advocate also mentioned that the demand is mainly hit by time limit specified by Section HA of Central Excise Act and the Department was aware of their manufacturing process as the same was communicated to the Superintendent Range under their letter dated 2 -1 -1995. Finally he submitted that the applicants are willing to deposit the amount of duty confirmed by the Commissioner in the impugned order if certificate under Rule 57E of the Central Excise is issued in respect of supplies made to M/s. Associated Cement Company Ltd. He submitted that similar orders had been passed by the Tribunal in the following cases :