Jyoti Balasundaram, Member (J) - (1.)THE applicants herein who are engaged in the manufacture of excisable goods falling under Chapter 48 of the Schedule to the CETA, 1985 filed classification declaration No. 1/99-2000 declaring 12 products manufactured by them. It was found that they were clearing bituminised waterproof paper of various sizes to M/s. Wimco but had described the same as "unassembled paper packing container intended for the packing of match sticks". Show cause notices were issued proposing classification of the product above mentioned under CETA sub-heading 4807.10 attracting duty @ 16% ad valorem with effect from March, 1999 onwards instead of CETA sub-heading 4819.11 at nil rate of duty. THE adjudicating authority confirmed the differential duty demand and also imposed penalty. Aggrieved by the adjudication orders dated 30-3-2001 passed by the Additional Commissioner and 28-6-2001 passed by the Assistant Commissioner the assessees preferred appeals and stay applications to the Commissioner (Appeals), who vide stay order dated 20-9-2001 directed pre-deposit of Rs. 7 lakhs towards duty and Rs. 7 lakhs towards penalty. THE applicants sought modification of the order which was rejected due to non-compliance with the directions for pre-deposit. THE Commissioner (Appeals) dismissed the appeals for non-compliance with Section 35F of the Central Excise Act, 1944. Hence these applications for waiver of pre-deposit of duty of Rs. 15,41,887/- and penalty totalling to Rs. 12,45,510/-.
(2.)Learned Chartered Accountant Shri Gajendra Jain submits that the issue of classification of the products stands settled by the Tribunal decision in the case of Converter v. CCE - 1999 (112) E.L.T. 980 which has been upheld by the Supreme Court and therefore the Commissioner (Appeals) should have granted unconditional waiver and there is no question of being asked to deposit any amount towards duty or penalty. The further plea is that the demand of Rs. 11,70,510/- is barred by limitation as the assessees had correctly described their product in their classification declaration. He therefore prays that waiver of pre-deposit and stay of recovery pending the appeals.
The prayer is opposed by the learned DR Shri M.H. Shaikh who submits that the issue in dispute in the case of Converter v. CCE cited supra was classification of similar products under CETA sub-heading 4819.11 as "cartons, boxes, containers and cases intended for packing of match sticks" as claimed by M/s. Converter or CETA sub-heading 4819.19 as "other packing containers" while the rival entries in the present case are CETA sub-heading 4807.10 which covers "paper and paperboards laminated internally with bitumen, tar or asphalt" as upheld by the authorities below and CETA sub-heading 4819.11 and therefore the decision in the Converter case is distinguishable. He also submits that the Commissioner (Appeals) has noted the distinction and has also considered the applications for modification and then rightly dismissed the appeals for non-compliance. On the time bar aspect he reiterates the finding of the adjudicating authorities. He therefore prays that the applicants be directed to deposit the entire amounts of duty and penalty at this stage.

(3.)WE have carefully considered the rival submissions. Prima facie it cannot be said that the decision in the case of Converter v. CCE settles the issue on classification in the present case as in the earlier case the dispute only related to sub-headings of Chapter heading 48.19 while in the present case, the dispute relates to classification under different Chapter headings namely, 48.07 and 48.19. The argument on limitation is also debatable in view of the finding that the assessees failed to disclose vital information regarding the description of the product, namely, that it was bituminised paper which would have a bearing on the classification. Having regard to the above no case for total waiver has been made out. WE therefore direct pre-deposit duty of Rs. 4 lakhs, which is approximately the amount prima facie within the normal period of limitation, within a period of four weeks from today and on such deposit, pre-deposit of balance duty and penalties shall stand waived and recovery thereof stayed pending the appeals. Failure to comply with this direction shall result in vacation of stay and dismissal of appeals without prior notice.