ORDER
S.L. Peeran, Member (J)
1. This stay application and appeal arise from Order-in-Appeal No. 548/99-CE dated 29.4.1999 passed by Commissioner (Appeals) dismissing their appeal under proviso to Section 35F of the Act for non deposit of the amounts as directed in the interim order. The Additional Commissioner in the Order-in-Original had confirmed a duty demand of Rs. 6,91,780.57 and penalty of Rs. 60,000/-. He has noted about the amount of Rs. 1,53,033 which had been deposited by TR-6 challans which has been given adjustment.
2. Ld. Advocate submits that the issue pertains to classification of a product cultured bath tubs and FRB bath tubs and shower trays, wash carters, etc. They had claimed exemption from duty in terms of Tariff sub heading 2504.90 which carried nil rate of duty. They have not filed classification list and paid duty as the product was exempted and further they were within the exemption limit under Notification No. 175/86 dated 1.3.1986. However, the department has proceeded to classify as articles of stone under sub heading 6807 carrying 30% duty. It is his contention that notwithstanding the aspect pertaining to levy of duty, the demands are not sustainable for two reasons: (i) that the demands are barred by time as they held a bona fide belief that the item being covered under Chapter heading 2504.90 & (ii) that they are eligible for Modvat credit in view of the use of resins and there will be revenue neutrality in the matter. Therefore, he further submits that already the appellants have pre deposited Rs. 2,03,000/- and therefore full waiver should have been given by the Commissioner (Appeals) for the balance amount. It is his further contention that the Tribunal has in the case of Golden Polymarbles Ltd. v. CCE as reported in 1999 (105) ELT 337 : 1999 (81) ECR 442 (T) has upheld the classification in like product under Chapter 6807. However, the judgement proceeded on the basis of Rajasthan High Court’s judgement rendered in the case of Polar Marmo Agglomerates Ltd. v. UOI as in which had distinguished the HSN Notes. He submits that however this judgement of Rajasthan High Court has been upset by Apex Court. Further, the Tribunal judgement on classification has not been upset as yet and it is still a binding force. He contends that for the reason demand being time barred and the Modvat being available to them, the demand should not be sustainable and therefore seeks for total waiver in the matter.
3. Ld. DR Shri S. Kannan submits that classification under Sub heading 2504.90 will not be appropriate and the Tribunal ruling is no longer a good law in view of the Rajasthan High Court judgement having been set aside by Apex Court and the Tribunal primarily had relied on that judgement. It is his contention that Additional Commissioner has taken note of the Explanatory Notes under HSN which is a persuasive and binding force. Therefore, the later heading 6807 adopted by the department is an appropriate heading, He submits that the appellants had not taken a licence and had suppressed the fact of manufacture and hence the demands are sustainable.
4. On a careful consideration of the submission, we notice that the appellants have already pre deposited Rs. 2,03,000/- in the matter. The aspect pertaining to Modvat eligibility and demands being time barred has prima facie considerable and to be taken note of while granting waiver of pre deposit. As appellant has got an arguable point on this aspect, waiver for balance of duty is granted and its recovery is stayed. As the Commissioner has not decided the matter on merits, the impugned order is set aside and remanded to Commissioner (Appeals) for de novo consideration with a direction to take up the appeal and decide the same on merits without insisting on further predeposit in the matter. The appeal succeeds by way of remand.
(Pronounced and dictated in open Court).