K.K. Mehra Vs. Commissioner of Central Excise

K.K. Mehra vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Apr 18, 2006

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Citation: sooperkanoon.com/42446
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: J Balasundaram, Vice-, S T Chittaranjan
Decided On: Apr 18, 2006
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

K.K. Mehra

Respondent

Commissioner of Central Excise

Excerpt

.....amount and personal penalty of rs. 25 lakhs each on the two directors of the company arise out of the order of the commissioner of central excise, pune-ii. the demand has been confirmed as a result of holding that m/s. drishti inds. ltd. have manufactured and cleared bolting cloth falling for classification under chapter heading 59.11 and not under chapter heading 54.06 of the schedule to the central excise tariff act, 1985 and not eligible to the benefit of exemption under different notifications as claimed by the assessee.3. we find that the issue had come up earlier before the tribunal, wherein third member held that the goods in dispute were grey fabric cloth and not bolting cloth, since no heat setting was carried out, which was required to be undertaken to prevent deformation by use. the majority order of the tribunal considered that it was necessary to cross-examine the experts who have tested the fabrics as to whether the goods in question were bolting cloth and the importance of heat setting was also recognised in the earlier order of the tribunal i.e. order nos. a/632-634/wzb/04/c-ii, dated 13-8-2004.4. however, the commissioner in the present impugned order has, after noting that shri chajjed and shri mohan kumar had categorically stated in cross-examination that heat setting had not been carried out on the fabrics, held that heat setting was not necessary for goods to confirm to the definition of "bolting cloth". according to learned advocate for the applicants, it was required to determine whether heat setting was carried out for the goods to be classified as bolting cloth under chapter 59. his further arguments are that the demand is also hit by time bar.5. the learned sdr, on the other hand, draws our attention to the finding of the commissioner at para 91 of the impugned order, that the board circular dated 16-2-1998 has set out correctly, that as per definition in hsn, the meshes of bolting cloth must not be deformed by use, but it is not.....

Full Judgment

1. The applications for waiver of pre-deposit of duty of Rs. 1,91,64,960/- confirmed against M/s. Drishti Inds. Ltd. together with penalty of an equal amount and personal penalty of Rs. 25 lakhs each on the two Directors of the company arise out of the order of the Commissioner of Central Excise, Pune-II. The demand has been confirmed as a result of holding that M/s. Drishti Inds. Ltd. have manufactured and cleared Bolting Cloth falling for classification under Chapter Heading 59.11 and not under Chapter Heading 54.06 of the Schedule to the Central Excise Tariff Act, 1985 and not eligible to the benefit of exemption under different Notifications as claimed by the assessee.

3. We find that the issue had come up earlier before the Tribunal, wherein third Member held that the goods in dispute were Grey Fabric Cloth and not Bolting Cloth, since no heat setting was carried out, which was required to be undertaken to prevent deformation by use. The majority order of the Tribunal considered that it was necessary to cross-examine the experts who have tested the fabrics as to whether the goods in question were Bolting Cloth and the importance of heat setting was also recognised in the earlier order of the Tribunal i.e. Order Nos. A/632-634/WZB/04/C-II, dated 13-8-2004.

4. However, the Commissioner in the present impugned order has, after noting that Shri Chajjed and Shri Mohan Kumar had categorically stated in cross-examination that heat setting had not been carried out on the fabrics, held that heat setting was not necessary for goods to confirm to the definition of "Bolting Cloth". According to learned Advocate for the applicants, it was required to determine whether heat setting was carried out for the goods to be classified as Bolting Cloth under Chapter 59. His further arguments are that the demand is also hit by time bar.

5. The learned SDR, on the other hand, draws our attention to the finding of the Commissioner at para 91 of the impugned order, that the Board circular dated 16-2-1998 has set out correctly, that as per definition in HSN, the meshes of Bolting Cloth must not be deformed by use, but it is not indicated that heat setting is a pre-condition of the same. He, therefore, submitted that in view of these findings, demand of duty is sustainable and pressed for rejecting the stay applications.

6. We have gone through the remand order passed by the Tribunal and find that prima facie case is in favour of the applicants since without process of heat setting on "Fabric", it cannot be considered as Bolting Cloth falling for classification under Chapter Heading 59.11. Since both Shri Chajjed and Shri Mohan Kumar have clearly stated in cross-examination that such process has not been carried out on the fabric, we find a strong prima facie case for waiver of pre-deposit.

Therefore, we waive pre-deposit of the duty and penalties and stay recovery thereof pending these appeals.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties K.K. Mehra vs Commissioner of Central Excise Same Subject Service Tax Same Judge J Balasundaram, Vice-, S T Chittaranjan