Tribunal rules duty demand barred by limitation, excludes generator & filter value from assessable value.

The Tribunal held that the demand of duty was barred by limitation as there was no mala fide intention on the part of the appellant. The generator and filter were not integral parts of the goods manufactured by the appellant, and their value should not be included in the assessable value of the paint booth. The demand of duty and penalty were set aside, allowing the appeals of the appellants with consequential relief.

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Issues involved: Classification of goods under Central Excise Tariff Act, 1985; Inclusion of value of hot air generator and filter blower in assessable value of paint booth; Invocation of extended period of limitation for raising demand of duty.

Classification of goods: The appellant manufactured paint booths and other automobile service equipment, clearing them under Tariff Heading 8424.00. The Revenue contended that hot air generator and filter were integral parts of the Paint and Drying Booth Cabinet, classifying it under Heading 8419.10 instead. A show cause notice was issued demanding duty, interest, and penalty.

Inclusion of value of hot air generator and filter blower: The appellant argued that the paint booth was a complete commodity sold without the generator and filter, which were optional items for enhancing efficiency. The Commissioner confirmed duty by treating the entire realization as cum-duty price. The Tribunal found that the generator and filter were not brought to the factory or supplied with the paint booth, concluding they were not part of the goods manufactured by the appellant.

Extended period of limitation: The Tribunal held that the demand of duty was barred by limitation as the non-disclosure of supplying the generator and filter did not indicate any mala fide intention on the part of the appellant. Positive suppression or misstatement with intent to evade duty is required for invoking the extended period of limitation, which was not present in this case. The demand of duty and penalty were set aside, allowing the appeals of the appellants with consequential relief.

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