Ranga Industries vs Collector of C. Ex.

Kanakaraj, J.

The petitioner challenges the order of the second respondent - The Customs, Excise and Gold (Control) Appellate Tribunal dated 27-12-1990

passed in a stay application.

The appeal before the second respondent-Tribunal relates to the demand of duty to the tune of Rs. 10,25,388.19 for the period from 11-6-

1987 to 31-7-1989 and the personal penalty of Rs. 50,000/- imposed by the first respondent-Collector of Central Excise on 8-8-1990. The

Tribunal points out that the petitioner was paying under Tariff heading No. 86.07 and they suddenly changed the classification into Tariff Heading

No. 7325 with effect from 1-3-1988 and so described the goods in the gate passes. It is disputed by the petitioner by referring to the actual

classification list, which seems to suggest that the petitioner had only indicated Tariff Heading No. 73.25 and were also relying on exemption

Notification No. 223/88 as amended by Notification No. 66/89 dated 1-3-1989. There is also question whether the petitioner gets rough casting

from out-side and they merely do the finishing work and that the character of the goods is not changed. In other words, it is claimed that the goods

remain as castings. There is also the point of limitation, which has been noticed by the Tribunal. Ultimately, the Tribunal came to the conclusion that

the petitioner has an arguable case in the appeal. However, the Tribunal observed that the petitioner does not have a strong prima facie case. So

far as the question of financial hardship is concerned, the Tribunal observed that there is no plea by the petitioner in the grounds of appeal. This is

disputed by the petitioner and it is contended that the petitioner has also pleaded financial difficulty in paying the entire amount demanded.

Ultimately, the Tribunal directed the petitioner to pay a sum of Rs. 5,00,000/- as a condition for taking the appeal on file u/s 35F of the Central

Excises and Salt Act, 1944.

Mr. Jayachandran, learned counsel for the respondents submits that this is a case where the petitioner has unilaterally changed the classification

from Tariff Heading No. 86.07 to 73.25 and that this will amount of fraud, as observed by the first respondent. Therefore, he insists that the order

of the Tribunal should be sustained.

Having given my anxious consideration to the rival submissions, I am of the opinion that the Tribunal is in error in not considering the financial

aspect of the petitioner before directing the payment of Rs. 5,00,000/-. The Tribunal has also agreed that the petitioner has an arguable case in the

appeal. Therefore, I am inclined to modify the order of the Tribunals follows : The Petitioner is directed to deposit a sum of Rs. 2,00,000/-

(Rupees two lakh only) within 8 (eight) weeks from today. The rest of the amount shall stand waived till the disposal of the appeal by the Tribunal.

This writ petition is ordered in the above terms. There will be no order as to costs.