Full Judgment
2. The duty of Rs. 8.95 lakhs approximately has been demanded on the ground that Uninterrupted Power Supply Systems (UPS for short) manufactured by the applicant are classifiable under heading 85.43 of the Tariff not under heading 85.04 as claimed by the assessee. Penalty of Rs. 5,000 has also been imposed.
3. Advocate for the applicant contends that classification of UPS under heading 85.43 determined by the Tribunal in its decision in J.K.Synthetics CCE has been referred for reconsideration by Mangalore Chemicals & Fertilisers Co. Ltd. v. CC .
The latter decision referred to the opinion given by the World Customs Organisation that the goods are classifiable under heading 85.43. He contends that the Tariff heading in the Customs and Central Excise Tariff are identical, both being derived from Harmonized System of Nomenclature (HSN for short). He further contends that notices to show cause issued on the assumption that goods are classifiable under heading 85.43.
4. The departmental representative contends that the classification determined is in accordance with the decision of the Tribunal in J.K.Synthetics v. CCE . Operation of the order is still in force. He says that notice to show cause reasons why classification claimed by the assessee is not accepted.
5. We do not prima facie find merit for the applicant on the latter ground. The notice to show cause proposed classification under heading other than that claimed by the assessee and demanded duty payable on such classification. However, on merits the applicant has a case, in that the Bench while deciding Mangalore Chemicals & Fertilisers Co.
Ltd. v. CC has indicated sufficient grounds for reconsideration of the decision in J.K. Synthetics v. CCE.6. In these circumstances we accept the offer made by the applicant to continue with bank guarantee for duty amount pending in the appeal and accordingly waive deposit of the duty and penalty and stay their recovery.