Essential function governs classification; absence of suppression and limitation defeated duty demand, penalty and confiscation.

Goods are classified by their essential function, and items admittedly used to carry electric current were correctly treated as electric wires and cables despite being processed from bare copper wire for use in carbon brushes. The duty demand could not be sustained because the record did not establish clandestine clearance or suppression of production, and the proceedings were time-barred under the applicable limitation provision. In the absence of suppression, penalty and confiscation also lacked foundation. The Collector's order was set aside and the appeal was allowed.

---

---

Issues: (i) Whether the goods manufactured were correctly classifiable as electric wires and cables. (ii) Whether the duty demand, penalty and confiscation were sustainable in the absence of suppression or clandestine clearance and in view of limitation.

Issue (i): Whether the goods manufactured were correctly classifiable as electric wires and cables.

Analysis: The determining feature for classification was the function of the goods. Since the goods were admittedly used to carry electric current, their identity answered to that of electric wires and cables. The fact that they were processed from bare copper wire and used in carbon brushes did not alter their essential character for classification purposes.

Conclusion: The classification as electric wires and cables was correct and was confirmed.

Issue (ii): Whether the duty demand, penalty and confiscation were sustainable in the absence of suppression or clandestine clearance and in view of limitation.

Analysis: The demand could not be sustained under Rule 9(2) or Rule 173Q, as the material did not establish clandestine clearance or suppression of production. The proceedings were also held to be time-barred under the applicable limitation provision. In the absence of suppression, there was no basis for penalty or confiscation of the goods or the plant.

Conclusion: The duty demand was time-barred and the penalty and confiscation were unsustainable.

Final Conclusion: The order of the Collector was set aside and the appeal was allowed.

Ratio Decidendi: Goods are to be classified according to their essential function, and where the evidence does not establish suppression or clandestine clearance, a duty demand, penalty, or confiscation cannot be sustained once the claim is barred by limitation.

---