Deliberate misdeclaration of excisable goods for an inapplicable duty concession sustains classification, duty demand, and penalty.

Ceramic tableware was held to remain classifiable under the heading applied by the department, because the assessee had removed goods with an incorrect description and later altered its claim only to secure an unavailable exemption. The departmental classification was therefore upheld and the duty demand sustained. Misdeclaration made deliberately to obtain concessional duty was treated as conduct attracting penal consequences under the excise penalty provision, so the penalty was also sustained. The challenge to both demand and penalty failed, and the departmental order was affirmed in full.

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Issues: (i) Whether ceramic tableware was correctly classifiable under the heading claimed by the assessee or under the heading applied by the department for the period in dispute; (ii) whether penalty was exigible for misdeclaration made to avail an unwarranted duty concession.

Issue (i): Whether ceramic tableware was correctly classifiable under the heading claimed by the assessee or under the heading applied by the department for the period in dispute.

Analysis: The goods were removed without correct description in the classification lists and without determining duty before clearance. The assessee had earlier claimed classification under the porcelain or china heading and paid duty at a concessional rate, but after the notification amendments sought the ceramic heading to obtain full exemption. On the facts, the conduct showed awareness that the goods remained classifiable under the earlier heading and that the later claim was made only to secure an unavailable exemption.

Conclusion: The classification adopted by the department was upheld and the duty demand was sustained.

Issue (ii): Whether penalty was exigible for misdeclaration made to avail an unwarranted duty concession.

Analysis: The incorrect declaration of the goods was held to be deliberate and made with the object of securing concessional duty benefits not otherwise available. Such knowing misstatement constituted conduct attracting penal consequences under the excise penalty provision.

Conclusion: Penalty was rightly imposed and sustained.

Final Conclusion: The challenge to the demand and penalty failed, and the departmental order was affirmed in full.

Ratio Decidendi: Deliberate misdeclaration of the classification of excisable goods to obtain an inapplicable duty concession justifies confirmation of duty demand and imposition of penalty.

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