1998(02)LCX0137

IN THE CEGAT, WEST REGIONAL BENCH, MUMBAI

S/Shri Gowri Shankar, Member (T) and G.N. Srinivasan, Member (J)

S.M. DYECHEM LTD.

Versus

COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III

Order No. 312/98-WRB/C-II, dated 6-2-1998 in E/Stay-1567-R/97-Bom in Appeal No. E/2340-R/97-Bom

Advocated By : Shri Vipin Jain, CA, for the Appellant.

Shri A.R.S. Kumar, JDR, for the Respondents.

[Order per : Gowri Shankar, Member (T)]. - Application is for waiver of pre-deposit of Rs. 12.39 lakhs of which it is claimed that Rs. 1.20 lakhs has already been paid.

2. Advocate for the applicant says that the duty has been demanded following the finding of the Commissioner (Appeals) that the product manufactured by it are classifiable under 39.06 as acrylic polymers in primary form carrying a higher rate of duty over-ruling its contention that the goods are finishing agents, dye carrier and similar products classifiable under Heading 38.09. He relies in support on the test report which indicates the product to be preparations containing acrylic polymer and suggests possible uses to finishing and fixing of any textile industry. This he says covers the heading. He further basis his point that one the primary material received by the applicant is acrylic polymers. He pleads financial hardship on the ground that the applicant has up to the end of March, 1997 incurred losses of Rs. 1.30 crores.

3. The departmental representative says that Heading 38.09 is a residual heading. He says by virtue of Note 6(b) to Chapter 39 conversion of one primary form to another has to be considered manufacture and this might have taken place.

4. Heading 38.09 is specifically for finishing agents and preparation of a kind used in a textile paper of like industries not elsewhere specified. The test report indicates the goods to be preparations composed of acrylic emulsion, (sic) good and suggests possible use for finishing and fixing. Prima facie the view of the Collector (Appeals) that because Heading 38.09 is a residual entry and there is no specific indication of end use in the test report, the goods are to be classifiable under Heading 38.09 would in our opinion to restrict the scope of Heading 38.09 to an extent which the facts do not contemplate. Taking this and the financial condition of the applicant into account, we order that on the applicant depositing a further amount of Rs. 2 lakhs within two months from today there will be a waiver of the balance amount and stay its recovery.

5. Compliance on 24th March, 1998.

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Equivalent 2000 (115) ELT 837 (Tribunal)