Blue Max Sports Wear Vs. Commissioner of Central Excise, - Court Judgment

Excerpt:
1. through this stay application, the appellants have sought waiver of pre-deposit of duty amount of rs. 8,82,108/- and penalty of equal amount as confirmed on them through the order-in-appeal dated 19-7-2001, passed by the commissioner (appeals).2. the appellants are engaged in the manufacture of branded cap of "dcm benettonlll, adidas brands" etc. they have been clearing the goods without payment of duty during the period in dispute 1993 to 1998 by alleging* the classification under chapter heading 6201.00 of ceta which prescribed nil rate of duty. whereas their product was classifiable under chapter heading 6501.10. they evaded duty of the disputed amount. the additional commissioner who adjudicated the show cause notice confirmed duty demand of rs. 12,67,391/- with equal amount of penalty. but the commissioner (appeals) reduced the duty amount to rs. 8,82,108/- and also set aside penalty against the partners of the appellant firm.3. the learned counsel has contended that the product of the appellants is classifiable only under chapter heading 6201.00 and the commissioner (appeals) has wrongly held the same to be classifiable under chapter heading 6501.80 of the ceta, he has also argued that the demand is time barred. the appellants, according to him, have a very strong prima facie case for claiming total waiver of pre-deposit of duty and penalty amounts.4. on the other hand, the learned jdr has reiterated the correctness of the impugned order of the commissioner (appeals).6. the dispute relates to the classification of the product, named above, manufactured by the appellants, as according to the appellants, the product is classifiable under chapter heading 6201.00 which carried nil rate of duty while the stand of the revenue is that the same is classifiable under chapter heading 6501.80 of the ceta. the commissioner (appeals) has recorded the detailed reasons for holding the classification in favour of the revenue. we, at this stage, do not find any sufficient ground to disagree prima-fade with the findings of the commissioner (appeals). moreover, this being a question of fact requires detailed scrutiny of the material on record. no definite findings regarding correct classification of the product of the appellants under chapter heading 6201 of the ceta as claimed by them, can be recorded. therefore, it is difficult to conclude that the appellants have a strong prima facie case for claiming total waiver of pre-deposit of duty amount and penalty.7. on the face of it, it is difficult to observe that the demand is time barred. this question also requires scrutiny of the facts and material brought on record.8. however, keeping in view the facts, circumstances and the issues involved, the appellants are directed to make pre-deposit of rs. 2,50,000/-towards duty amount on or before 28-2-2002. on making this deposit, the requirement of pre-deposit of duty amount and entire penalty shall stand waived and recovery stayed till the disposal of the appeal. in case, they however failed to make this deposit within specified time, their appeal shall become liable to be dismissed under section 35f of the central excise act. to come up for reporting compliance on 6-3-2002.

Judgment:
1. Through this stay application, the appellants have sought waiver of pre-deposit of duty amount of Rs. 8,82,108/- and penalty of equal amount as confirmed on them through the Order-in-appeal dated 19-7-2001, passed by the Commissioner (Appeals).

2. The appellants are engaged in the manufacture of branded cap of "DCM Benettonlll, Adidas brands" etc. They have been clearing the goods without payment of duty during the period in dispute 1993 to 1998 by alleging* the classification under Chapter Heading 6201.00 of CETA which prescribed Nil rate of duty. Whereas their product was classifiable under Chapter Heading 6501.10. They evaded duty of the disputed amount. The Additional Commissioner who adjudicated the show cause notice confirmed duty demand of Rs. 12,67,391/- with equal amount of penalty. But the Commissioner (Appeals) reduced the duty amount to Rs. 8,82,108/- and also set aside penalty against the partners of the appellant firm.

3. The learned Counsel has contended that the product of the appellants is classifiable only under Chapter Heading 6201.00 and the Commissioner (Appeals) has wrongly held the same to be classifiable under Chapter Heading 6501.80 of the CETA, He has also argued that the demand is time barred. The appellants, according to him, have a very strong prima facie case for claiming total waiver of pre-deposit of duty and penalty amounts.

4. On the other hand, the learned JDR has reiterated the correctness of the impugned order of the Commissioner (Appeals).

6. The dispute relates to the classification of the product, named above, manufactured by the appellants, as according to the appellants, the product is classifiable under Chapter Heading 6201.00 which carried Nil rate of duty while the stand of the Revenue is that the same is classifiable under Chapter Heading 6501.80 of the CETA. The Commissioner (Appeals) has recorded the detailed reasons for holding the classification in favour of the Revenue. We, at this stage, do not find any sufficient ground to disagree prima-fade with the findings of the Commissioner (Appeals). Moreover, this being a question of fact requires detailed scrutiny of the material on record. No definite findings regarding correct classification of the product of the appellants under Chapter Heading 6201 of the CETA as claimed by them, can be recorded. Therefore, it is difficult to conclude that the appellants have a strong prima facie case for claiming total waiver of pre-deposit of duty amount and penalty.

7. On the face of it, it is difficult to observe that the demand is time barred. This question also requires scrutiny of the facts and material brought on record.

8. However, keeping in view the facts, circumstances and the issues involved, the appellants are directed to make pre-deposit of Rs. 2,50,000/-towards duty amount on or before 28-2-2002. On making this deposit, the requirement of pre-deposit of duty amount and entire penalty shall stand waived and recovery stayed till the disposal of the appeal. In case, they however failed to make this deposit within specified time, their appeal shall become liable to be dismissed under Section 35F of the Central Excise Act. To come up for reporting compliance on 6-3-2002.