1999(12)LCX0119
IN THE CEGAT, WEST ZONAL BENCH, MUMBAI
S/Shri Gowri Shankar, Member (T) and J.N. Srinivasa Murthy, Member (J)
TARAPUR COATINGS AND ADHESIVES LTD.
COMMISSIONER OF C. EX., MUMBAI-III
CASE QUOTED
Commissioner v. Cotspun Ltd. — 1997(07)LCX0226 Eq 1998 (099) ELT 0024 (Tribunal) — Distinguished ........ [Para 6]
Advocated By : Shri A.V. Phadnis, Advocate, for the Appellant.
Shri K.M. Patwari, JDR, for the Respondents.
[Order per : Gowri Shankar, Member (T)]. - The application is for waiver of deposit of duty of Rs. 8.87 lakhs and penalty of Rs. 5 lakhs on the assessee and Rs. 3.5 lakhs on its Director.
2. We have heard both sides.
3. The dispute relates to classification of the product Tacodur T-75. Applicant had claimed classification of this product under Heading 29.42 of the tariff. The impugned order has confirmed its classification under Heading 35.06.
4. The department’s case for classification of the product under Heading 35.06 is based on its view that the product cannot be used except by admixture with another product Tacobond T-15/75 which results in an adhesive classifiable under Heading 35.06. The Commissioner (Appeals) has relied upon the provisions of note 2 to Section VI of the tariff. For this note to apply it has to be shown that the conditions contained in that note, that the two products are intended to be used complimentarily and are cleared together are satisfied. The Advocate for the applicant relies upon the invoices showing that the two products are not cleared in sets but separately. The Departmental Representative contends that the products are to be used together and as adhesive. He is unable to show any evidence, even if it was cleared in proportionate to each other, to justify the conclusion that they were intended to be used together in order to obtain an adhesive classifiable under Heading 35.06.
5. Apart from this the fact remains that the classification list for the years 1991, 1992, 1993 have been approved by Assistant Collector. It is stated that this approval was questioned by way of an application to the Commissioner (Appeals), who accepted the application and set aside the classification. His order is stated to be pending before us in an appeal. Notice in the present proceedings demands duty for the period September, 1991 to August, 1993 i.e. the period covering clearances under the approved classification list.
6. It is difficult to accept where the demand itself is issued after the Assistant Collector initially approved the classification of the product, there has been suppression to justify the invoking of extended period. The Departmental Representative’s reliance upon the Supreme Court judgment in C.C.E. v. Cotspun Ltd. - 1998 (099) ELT 24 is of no avail to him; there is no question here of any demand being confirmed for a period of 6 months prior to the notice. There is a gap of about 3 years of the period for which duty is demanded and the date of the notice. We are not entirely satisfied on the basis of the evidence before us that the product is in fact classifiable under Heading 29.42. However, that is not the issue before us. On that issue i.e., classification under Heading 35.06, we have to hold on the basis of our discussions that the applicant has a strong prima facie case. We accordingly waive deposit of duty and penalty and stay its recovery.
Equivalent 2000 (125) ELT 846 (Tribunal)