Customs, Excise and Gold Tribunal - Delhi
Zarafshan Chemicals P. Ltd. vs Collector Of C. Ex. on 15 December, 1997
Equivalent citations: 1998(97)ELT539(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. This is a stay application filed with reference to the order of Commissioner (Appeals) dated 8-10-1997.
2. Learned Counsel stated that the appellants manufactured "liquid gold" which is used by bangles industry.
3. A question has arisen as to what was the correct classification of this product and whether they were entitled to the benefit of Notification 1/93.
4. After the issue of the show cause notice, the case was adjudicated by the learned Dy. Collector who vacated the seizure made on 10-8-1994 and the proceedings initiated by the show cause notice dated 7-2-1995. The Department, however, appealed against this order and the Commissioner (Appeals) set aside the order of the Dy. Collector.
5. It was their submission that the learned Commissioner has erred in doing so.
6. It was their contention that the liquid gold is an article of gold under Chapter Heading No. 7101.90 but was entitled to the benefit of nil rate of duty in terms of the General Notification 66 which prescribes a Nil rate for articles falling under Heading 71.2 (sic).
7. It was his submission that the learned Commissioner has 'erred in holding that the item was classifiable under 3207.90 as ceramic colours. It was an article of gold classifiable under Heading proposed by them in view of the Allahabad High Court judgment dated 7-3-1968 in the case of Ratan Lal Garg wherein it was held that liquid gold is a thing manufactured from gold.
8. He would also like to cite a Customs Notification 156/95-C.E. indicating that the Customs Department had extended the benefit of the exemption Notification to gold in any form including liquid gold. He would also like to draw attention to the Chapter Note 4 to Chapter 71 which refers to alloys containing precious metals which is to be treated as an alloy of precious metal if any one precious metal constitutes as much as 2 per cent by weight of the alloy.
9. Insofar as the question of exemption Notification is concerned, learned Commissioner has denied the benefit on the ground that they are using the trade mark of another person who was not entitled to the benefit of the exemption Notification.
10. It was his submission that the learned Dy. Collector had looked into all the relevant aspects in great details and had taken note of the fact that the trade mark "golden oriole" had been assigned to them legally and the trade mark authorities had recognised the same and, therefore, on this ground alone the benefit of the exemption Notification could not be denied.
11. In view of the above position, the learned Counsel submits that a prima facie case was in their favour and, therefore, stay may be granted.
12. Learned DR drew attention to the impugned order and stated that from the brief facts, it was evident that the appellants were engaged in the manufacture of ceramic colours commonly known as liquid gold without observing any Central Excise Procedures. In fact 85 phials of golden oriole were seized from a jeep.
13. On further investigations, the officers checked the stock and accounts and found that the goods were classifiable under Chapter Heading 32 and the appellants were not entitled to exemption under Notification 1/93 and, therefore, the demand was issued. The Deputy Collector had erred in coming to his conclusion and dropping the demand, therefore, the Collector has set aside the order. In this connection, he would like to draw attention to the fact that ceramic colours containing gold were not required to be treated as articles of gold as such, but classifiable under Chapter 32 in terms of the Tribunal's order in the case [of] National Gold Industries 1989 (42) E.L.T. 20 relied upon by the learned Commissioner.
14. Insofar as the question of Notification is concerned, the appellant is obviously and admittedly using the brand name of another person and, therefore, the learned Commissioner has rightly denied the benefit thereof.
15. Learned DR further stated that he would like to further emphasise that the appellant had not pleaded financial hardship. In the circumstances, their application may be rejected.
16. Learned Counsel reiterated his submissions and stated that while on the issue of classification another appeal is pending before the Tribunal, he would, for the purpose of this application, like to emphasise the claim with reference to the contention that the benefit of exemption Notification was required to be extended in view of the fact that the brand name had become their own by virtue of legal assignment.
17. Further in their affidavit accompanying their application, they had mentioned about their financial position.
18. We have considered the above submissions. We observe that the learned DR's arguments have strong force. Prima facie, it was not an alloy and admittedly it was being used inter alia for decoration of bangles, etc. and the learned Commissioner their own initial declaration of the product as .ceramic colour. We also notice that the learned Commissioner (Appeals) has relied upon the Tribunal's order for determining the classification. The Allahabad High Court judgment cited by the learned Counsel in his application is an order passed with reference to Defence of India Rules whereas the Tribunal's above order prima facie appears to cover the aspect of excise classification and the learned Commissioner having relied thereupon, at this stage, the prima facie case in respect of classification is required to be considered in terms of the Tribunal's order in force. Insofar as the question of exemption Notification and trade mark is concerned, undisputedly, a trade mark was being used and the issue of assignment and its implications other details and aspects can be gone into at length more appropriately at the time of hearing of the appeal and not at this stage.
19. Insofar as the question of financial hardship is concerned, learned DR has correctly stated that nothing in particular has been mentioned even in the affidavit. In fact there is nothing before us which may show that they are financially hard pressed.
20. We also note that the amount involved is approximately Rs. 2,34,0007- only. Looking to the totality of facts and circumstances of the case and the above aspects in particular, we are not inclined to grant stay at this stage as sufficient grounds for waive have not been shown. However, we allow them 8 weeks time from the date of receipt of this order within which to deposit the amount and failing which their appeal will be dismissed without further notice. To come up for reporting compliance on 24-2-1998.