Judgment
1. This is an application for dispensing with the pre-deposit of duty of Rs. 2,44,168/- demanded from the applicants herein by the Assistant Collector of Central Excise, Division III, Ghaziabad which has been upheld by the Collector of Customs and Central Excise (Appeals), Ghaziabad in the impugned order dt. 31-10-1994.2. Shri Rajesh Chhibber, the Learned Counsel appearing for the applicants submitted that the issue involved is the classification of forge products for automobile industry manufactured by the applicants herein. They had claimed classification of these goods under Heading 73.26 of the Central Excise Tariff Act, 1985 which covers other articles of iron and Steel forging of the same but further work.
Further the lower authorities have not accepted their claim for such classification but have held that the goods were classifiable under Heading 72.07 as semi-finished product of iron and steel. The Learned Counsel submitted that the lower authorities were in an error in adopting such a classification and he relied upon the Tribunal's decision in the case of S.L.M. Udyog v. Collector of Central Excise, reported in 1994 (72) E.L.T. 492 where similar articles Tribunal had held classification would be under Chapter 73. Financially, the Learned Counsel pleaded, that the pre-deposit of duty cause them due hardship because as per their balance sheet for the period in the. 31st March, 1994 suffered an accumulated loss of over Rs. 2,00.000/- 3. Shri Somesh Arora, the Learned SDR opposed this stay and referred to the detailed reason contained in the Assistant Collector's order. The goods admittedly are in a semi-finished condition and in such case their classification will be only under Heading 72.07 and the question of bringing such thing under Chapter 73 will not arise at all. The department's stand is now supported by reasoning of Supreme Court in the case of TISCO v. Collector of Central Excise reported in 1995 (75) E.L.T. 3 where the Supreme Court had held that the goods will be considered semi-finished between the raw material and finished product stage and also if such goods require further processing. Financially, the Learned DR urged, that on perusal of the balance sheet would show that the applicants' financial position is very comfortable their current asset is more than their liability. They have arrived at the loss after providing for a generous depreciation.
4. We have carefully considered the submissions made by both the sides.
On prima facie view of the issue under dispute, we are inclined prima facie to agree with the submissions made by the Learned DR that the goods in this case would appear to be in a semi-finished stage and in such a condition their classification under Chapter 72 would prima facie appear to be more appropriate. However, merits of the case can be gone into in detail only when the appeal is heard on merits. As regards the financial position of the applicants, we find sales revenue of Rs. 41 lakhs shown in the balance sheet which reflects satisfactory position to make pre-deposit, as such we reject the stay application and direct the applicants to make pre-deposit demanded on or before 30th April, 1995.
5. The matter will come up for ascertaining compliance on 15th May, 1995.