PVC sheeting classification under the new tariff and misdeclaration-based extended limitation upheld against the assessee.

PVC sheeting was treated as classifiable under Heading 3920 rather than Heading 3926.90 because the new tariff scheme and Chapter Note 10 of Chapter 39 covered sheets and sheeting within the broader heading; an earlier Supreme Court ruling under differently worded tariff entries was distinguished. On limitation, repeated inconsistent declarations, clearance at a lower duty rate, and an approved classification list under the relevant heading were sufficient to support misdeclaration and the invocation of the extended period. The demand was therefore not time-barred, and the assessee's plea of absence of suppression failed.

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Issues: (i) Whether PVC sheeting was classifiable under Heading 3920 or under Heading 3926.90 of the Central Excise Tariff; (ii) Whether the demand was barred by limitation on the ground that there was no suppression or misdeclaration.

Issue (i): Whether PVC sheeting was classifiable under Heading 3920 or under Heading 3926.90 of the Central Excise Tariff.

Analysis: The decisive factor was the wording of the new tariff and Chapter Note 10 of Chapter 39. The earlier Supreme Court ruling relied on by the assessee was distinguished because it turned on an old tariff entry that separately referred to sheets and sheeting. Under the new tariff, the scheme and chapter notes used the expression sheets and treated film as including sheeting of specified thickness, so the product could not be taken out of Heading 3920 merely because it was described as sheeting. The competing heading 3926.90 was therefore held inapplicable.

Conclusion: The PVC sheeting was correctly classifiable under Heading 3920 and not under Heading 3926.90, against the assessee.

Issue (ii): Whether the demand was barred by limitation on the ground that there was no suppression or misdeclaration.

Analysis: The assessee had repeatedly stated that duty would be paid under protest at a higher rate until approval of the classification list, yet duty was cleared at a lower rate. The record also showed shifting stands in different classification lists and an approved classification list under Heading 3920 during the relevant period. These circumstances were treated as sufficient to infer misdeclaration and to hold that the department had been misled, justifying invocation of the extended period.

Conclusion: The demand was not time-barred, and the plea of absence of suppression failed, against the assessee.

Final Conclusion: The order of the lower authorities was sustained in full, and the appeal failed on both classification and limitation.

Ratio Decidendi: Where the tariff wording and chapter notes under the new excise regime cover the goods in the claimed heading, an earlier ruling under differently worded tariff entries cannot control classification; repeated inconsistent declarations and clearance under a contrary protest arrangement may justify a finding of suppression for limitation purposes.

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