2004 (2) TMI 541 - AT - Central Excise

Tribunal rules on FRP sheets classification & time-barred show cause notices appeal

The Tribunal upheld the classification of FRP sheets under Chapter 39 of the Central Excise Tariff Act and ruled on the time-barred nature of the show ... Classification - Demand - Limitation Issues:1. Classification of FRP sheets under Central Excise Tariff Act.2. Time-barred show cause notices for duty recovery.Classification Issue:The appeal involved a dispute regarding the correct classification of FRP sheets under the Central Excise Tariff Act. The appellants contended that the product should be classified under a specific sub-heading, while the Revenue argued for a different classification. The Tribunal noted that the issue of classification had already been decided by a Larger Bench of the CESTAT in a previous case. The Tribunal concurred with the previous decision and held that the FRP sheets were correctly classifiable under Chapter 39 of the Central Excise Tariff Act, as opposed to Chapter 70 as claimed by the appellants.Time-barred Show Cause Notices:The main contention of the appellants was that the show cause notices issued to them, demanding differential duty, were time-barred. The appellants argued that as per Rule 173B(3) of the Central Excise Rules, the department was required to reclassify the goods and issue demands within a period of six months from the relevant date. The Revenue, on the other hand, asserted that the show cause notices were issued within the prescribed time limit, without applying suppression of facts or extended period provisions. The Tribunal analyzed the relevant provisions of Section 11A of the Central Excise Act, which stipulate that show cause notices must be issued within six months from the relevant date for recovery of duty short-paid, in the absence of allegations of suppression of facts, fraud, collusion, etc. The Tribunal found that while some of the show cause notices were issued within the six-month period from the relevant date, one notice was issued after the deadline. Consequently, the Tribunal held that the demand for the quarter deemed time-barred was set aside, while the rest of the appeal was rejected.In conclusion, the Tribunal upheld the classification of FRP sheets under Chapter 39 of the Central Excise Tariff Act and ruled on the time-barred nature of the show cause notices, allowing the appeal in part and rejecting it in part based on the specific timelines of the notices issued.