2005 (7) TMI 466 - AT - Central Excise

Tribunal: No wilful intent to evade duty, disputed classification, Section 11A(1) proviso not applicable

The Tribunal dismissed the Revenue's appeal, ruling that there was no wilful intent to evade duty and citing the disputed classification of shells and ... Demand - Limitation Issues:1. Appeal against dropping demand for longer period under proviso to Section 11A(1) after confirming classification of cigarette packets as shells and slides under Heading 4819.90, imposing penalty under Rule 173Q.Analysis:1. The Revenue appealed against the Commissioner's order dropping the demand for the longer period under proviso to Section 11A(1) after confirming the classification of cigarette packets as shells and slides under Heading 4819.90 and imposing a penalty under Rule 173Q. The Revenue relied on previous decisions to argue that the assessee's failure to declare shells and slides in the classification lists but mentioning them in RT 12 Returns and invoices justified invoking the extended period of proviso clause to Section 11A(1).2. The advocate for the assessee argued that there was no mens rea to evade higher duty rates under 4819.90 as the shells and slides were declared in RT 12 Returns and invoices, and the classification was a disputed issue. The Tribunal found that invoking the penal clause required wilful intent to evade, which was not present in this case, as per established Supreme Court precedents.3. The Tribunal analyzed a Supreme Court decision where the proviso clause of Section 11A(1) was invoked due to discrepancies between classification lists and invoices. However, the Tribunal distinguished this case from the present one, highlighting changes in the law and classification procedures between 1988 and 1996. The Tribunal concluded that the proviso clause could not be invoked based on the cited case law.4. Referring to another Supreme Court case, the Tribunal noted that deliberate withholding of information was crucial to invoke the proviso clause under Section 11A(1). Since there was no deliberate withholding of information in this case, especially considering the disputed classification of shells and slides, the Tribunal found no grounds for wilful intent to evade, necessary for invoking the proviso clause.5. The Tribunal determined a duty shortfall under Heading 4819.90 and imposed a penalty, which was deemed adequate. Ultimately, the Tribunal dismissed the Revenue's appeal, finding no grounds to invoke the proviso clause under Section 11A(1) based on the presented facts.Conclusion:The Tribunal dismissed the Revenue's appeal, as it found no grounds to invoke the proviso clause under Section 11A(1) based on the lack of wilful intent to evade and the disputed classification issue of shells and slides.