ORDER
Archana Wadhwa, Member (J)
1. The prayer in the appeal is to dispense with the condition of pre-deposit of duty amount of Rs. 3,43,472.00 and personal penalty of Rs. 3,06,000.00. The above demand of duty has been confirmed against the appellants for the period 18.3.90 to 30.7.97 on the ground that the product manufactured by the appellants was not classifiable under Heading 7508 .00, as contended by the appellants but the same was properly classifiable under Heading 8607.00 as part of Railway Locomotive.
2. The Commissioner (Appeals) vide his impugned orders has observed as follows :-
“In the instant case, I appreciate the facts on records that, the appellants give the name to the impugned product as “Castings of Nickel and Nickel base alloys – unmachined/machined” and therefore distinguishing it from its actual classification under sub heading 8607.00. The impugned product in fact is known by the customer (Railways) as “Valve Seat Insert” which is exclusively used as ‘a part of Railway Locomotives’ which is its specific primary function’. The classification needs to be based on its use and the meaning attached to it. Incidentally this has never been disputed by the appellants.”
3. He has further observed that there is a specific entry meant for casting under chapter 73.25 but there is no specific entry provided for castings of nickel in Chapter 75. The appellants product-Nickel Castings manufactured by them is not of general nature but the same has been exclusively designed and meant for Railway and the Railways are using the same as a part of Railway Locomotive. As such, he has observed that the impugned items are properly classifiable under Heading 8607.00.
4. Shri Anthony, learned Manager of the appellants company submits that the Revenue has not discharge onus placed upon them for classifying the goods as Railway Locomotive parts in as much as no evidence has been placed on record that the Railways are using the same as parts of the Railway Locomotive. He submits that the apart from the fact that the allegation have not been conclusively proved by the Revenue that the goods are being used as part of railway, during the relevant period, the classification list filed by the them was properly approved by the proper officer though he fairly agrees that side by side the show cause notice was being issued raising demand of duties on the ground of classification of the goods. No financial hardship has been pleaded before us.
5. On the contrary Shri S.S.Bhagat, learned S.D.R. draws our attention to the reasoning adopted by the lower authorities and submits that the appellants have been placed with the orders from railways specifying the product in question and item was being manufactured by them exclusively as per the design of the railway. As observed by the Commissioner (Appeals) the appellants have not at all disputed the fact that the goods were being used by the railway as part of railway locomotive and they have not placed on record any contrary evidence. In view of the admitted position the goods have to be classified under Heading 8607.00 and as such, the appellants have no case on merit and should be directed to deposit the entire amount of duty and penalty.
6. We have considered the submission made by both the sides. After going through the impugned orders, we are of the view that the Appellate Authority has clearly held that the goods that is “Valve Seat Insert” was being manufactured as per design and specification of the railways; was being used as part of Railway Locomotive; that there is no entry for casting of nickel under Chapter 75. In view of the above, we are of the opinion that the appellants have no prima facie case in its favour so as allowed the stay petition unconditionally. We also note that the appellants have not pleaded any financial hardship. We direct the appellants to deposit the total amount of duty within a period of one month from today. Subject to such deposit being made, the entire amount of penalty shall stand waived and its recovery stayed during the pendency of the appeal. Matter to come up for reporting compliance on 29th March, 2004.
(Dictated in Court)