Classification under Central Excise tariff accepted, but long departmental silence barred the demand by limitation.

Self-adhesive BOPP film composed of release paper and BOPP film was held classifiable under Chapter Heading 39.19 rather than Chapter Heading 48.14, with the Revenue's classification contention accepted on merits. Limitation nevertheless operated in the assessee's favour because the classification lists had been accepted for a long period, declarations were on record, and no departmental objection had been raised; the demand could not survive beyond limitation despite the merits finding. The stated principle is that long departmental acceptance of declarations and classification lists can bar recovery by limitation even where the Revenue succeeds on classification.

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Issues: (i) Whether the product manufactured by the assessee was correctly classifiable under Chapter Heading 39.19 of the Central Excise Tariff Act, 1985 or under Chapter Heading 48.14 of the Central Excise Tariff Act, 1985; (ii) Whether the demand was barred by limitation in the absence of a ground on limitation in the appeal.

Issue (i): Whether the product manufactured by the assessee was correctly classifiable under Chapter Heading 39.19 of the Central Excise Tariff Act, 1985 or under Chapter Heading 48.14 of the Central Excise Tariff Act, 1985.

Analysis: The product was described as self-adhesive BOPP film consisting of release paper and BOPP film. The Revenue relied on the commercial description and the admitted use of BOPP film to contend that the goods were misdeclared and more appropriately classifiable as packing material under Chapter Heading 39.19. The competing classification under Chapter Heading 48.14 was rejected on merits.

Conclusion: The classification issue was decided in favour of the Revenue.

Issue (ii): Whether the demand was barred by limitation in the absence of a ground on limitation in the appeal.

Analysis: The classification lists had remained in force for a long period, declarations had been filed accordingly, and no objection had been raised by the department. In such circumstances, and following the stated circular-based verification requirement, the bar of limitation operated in favour of the assessee.

Conclusion: The limitation issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded on classification but failed on limitation, with the result that the assessee retained the benefit of limitation despite the Revenue's success on merits.

Ratio Decidendi: Where the department has accepted declarations and classification lists for a long period without objection, the demand cannot survive beyond limitation even if the Revenue succeeds on the classification issue.

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