2003 (9) TMI 583 - AT - Central Excise

Tribunal remands case for fresh decision on limitation issues & exemption notification

The Tribunal remanded the case to the Commissioner for a fresh decision on the issues of limitation and the availability of the exemption notification. ... Classification - SSI Exemption - Notification No. 175/86-C.E. - Demand - Limitation Issues: Classification of Liners, Demand of duty, Benefit of Notification No. 175/86, LimitationClassification of Liners:The appellants were engaged in manufacturing Railway Parts and Components, including Liners. A dispute arose regarding the correct classification of Liners under sub-heading 8607.00. The Assistant Commissioner initially held the Liners as non-excisable goods, but later, in de novo proceedings, classified them under Heading 86.07. The appellants appealed this decision, which was pending before the appellate authority. Subsequently, a show cause notice was issued, raising a demand of duty against the appellants for Liners manufactured and removed during a specific period. The appellants argued that the demand was unjustified as the assessments were not provisional during the relevant period.Demand of Duty:The show cause notice raised a demand of duty against the appellants for the Liners manufactured and removed during a specific period. The appellants contended that the demand was unjustified as there was a previous order by the Assistant Commissioner holding the Liners as non-excisable. They also raised concerns about clearances being clubbed with another entity's clearances, leading to an inflated demand. The Commissioner adjudicated the show cause notice, confirming the duty demand and imposing penalties, which the appellants challenged.Benefit of Notification No. 175/86:The appellants argued that they were entitled to the benefit of Notification No. 175/86 as their clearances were within the exemption limit. They contended that the goods were cleared without payment of duty based on the Assistant Commissioner's order classifying the Liners as non-excisable. The Commissioner did not extend the benefit of the notification, citing alleged clandestine removal of Railway Parts by the appellants.Limitation:The appellants argued that the demand was barred by limitation as it was raised beyond the prescribed period. They maintained that there was no suppression of facts or misstatement on their part, justifying the invocation of an extended limitation period. They also contended that the Commissioner erred in not considering the benefit of the notification based on alleged clandestine activities.In the judgment, it was noted that the Commissioner did not address the issue of limitation and failed to provide a valid reason for denying the benefit of Notification No. 175/86 to the appellants. The Tribunal found that the Assistant Commissioner's order classifying the Liners as non-excisable was followed by the appellants in good faith. Therefore, the matter was remanded to the Commissioner for a fresh decision on the disputed issues of limitation and the availability of the exemption notification. The appellants were granted the opportunity to present arguments on the correct classification of the goods. The appeal was allowed by way of remand for further consideration.