Customs, Excise and Gold Tribunal - Delhi
Asian Tubes (P) Ltd. vs Collector Of Central Excise on 14 September, 1995
Equivalent citations: 1996(81)ELT639(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. The captioned stay petitions have been filed for waiver of pre-deposit amounting to Rs. 1,94,674.08 and Rs. 4,47,763.69. As the two petitions arise out of the same impugned order, they are taken up together and are disposed of by this common order.
2. Shri G.S. Bhangoo, the learned Advocate arguing on the stay petitions submitted that the appellants are engaged in the manufacture of steel tubes; that for manufacture of these tubes, they were purchasing flat rolled products of thickness less than 5 mm.; that during the material period, some controversy arose about classification of flat rolled produts; that the Department was of the view that flat rolled products used by them were classifiable as flats. The Hon'ble Tribunal in the case of Calcutta Steel Industries v. Collector of Central Excise, Chandigarh reported in 1991 (54) E.L.T. 90 held that the flat rolled products used as inputs by the applicants were classifiable as bars, therefore, some of the suppliers of flat rolled products started describing them as bars. The learned Counsel submitted that in their case, the inputs namely flat rolled products were described as bars in their declaration filed under Rule 57G of the Central Excise Rules, 1944. They did not modify their modvat declaration. However, in their classification list effective from 6-5-1992, they had indicated that tubes are manufactured inter alia from flats having thickness below 5 mm.; that the dispute arose because of the impression of the Departmental Authorities that the input used by them was flats and not bars and therefore, the Department was of the view that flats were not described as inputs in the declaration filed under Rule 57G and therefore, the Assistant Collector confirmed the demand as set out in the show cause notice. The Collector (Appeals) in the impugned order also held that there is no doubt that flats had not been included in the list and therefore, there is no legal infirmity in the impugned orders and accordingly, rejected the appeals of the applicants. The learned counsel also submitted that if their input is treated as flat then they are entitled to the benefit of Notification No. 202/88-C.E., dated 20th May, 1988. The learned Counsel submitted that whatever view is taken about flat rolled product of thickness less than 5 mm. used by them, the Government revenue is not jeopardised and therefore prayed that pre-deposit of the amount may be waived. In addition, the learned counsel also submitted that the financial position of the applicants is not comfortable as they have been incurring loss. The learned Counsel therefore, pleaded in view of the prima facie case being in their favour as well as looking to the financial condition of the applicants, pre-deposit of duties may be waived.
3. Shri S.K. Tyagi, the learned JDR opposing the stay applications submitted that the fact remains that bars and flats are two distinct items and if at all the same product was being described as bars in some gate passes and flats in other gate passes, nothing prevented the applicants to amend their declaration filed under Rule 57G; that filing of declaration when the show cause notice was issued cannot undo the wrong which was brought to their notice. He therefore, submitted that the lower authorities have rightly held that the duty was payable and therefore, prayed that the stay petitions may outright be rejected.
4. Heard the submissions of both sides. On careful consideration of the submissions made before us, we find that there was divergence of practice of classification of the product in some Collectorates. We also observe that in case the input received by the applicants is treated as bars as held by this Tribunal in the case of Calcutta Steel then the declaration filed by them is already there. In case, the inputs used by the applicants is classified as flats as held by the lower authorities, then the duty paid on tubes will be reimbursible to the applicants inasmuch as steel tubes manufactured out of the flats are exempted under Notification No. 202/88-C.E., dated 20-5-1988. In addition, we find that the financial position of the applicants is not sound. Having regard to these facts and circumstances of the case, we waive the pre-deposit of the amount of duty and stay recovery proceedings pending the appeal.