2003 (9) TMI 504 - AT - Central Excise

Imported goods reclassified sans notice; demand found time-barred without evasion; Commissioner's decision overturned.

The appellants imported goods initially classified under one heading of the Customs Tariff but were later reclassified without a show cause notice. The ... Demand - Limitation - Suppression of facts Issues: Classification of goods under Customs Tariff - Time-barred demand due to absence of show cause notice and suppression of factsClassification of Goods under Customs Tariff:The appellants imported suction and discharge valves, initially classified under Heading 8481.80 of the Customs Tariff, assessed, and cleared on 12-10-98. Subsequently, an audit objection led to a recovery memo being issued on 10-11-99, reclassifying the goods under Heading 8414.90 of the Customs Tariff. The appellants contended that no show cause notice was issued for the change in classification, and the goods were cleared after due assessment under the original classification. They argued that the demand, issued after the statutory period of limitation under Section 28 of the Customs Act, was time-barred as there was no suppression of facts to evade duty. The Commissioner (Appeals) dismissed their appeal.Analysis:The absence of a show cause notice for reclassification, coupled with the fact that the goods were cleared based on the appellants' declaration and assessment by Customs, led to the conclusion that no suppression of facts could be attributed to the appellants. As no allegations of evasion were made and the demand was raised after the statutory limitation period, the extended period of limitation could not be invoked. Consequently, the demand was deemed time-barred, and the impugned order was set aside, allowing the appeal.---