2012 (5) TMI 494 - AT - Central Excise

Tribunal Upholds Commissioner's Decision on Tea Machine Classification

Commr. of Central Excise, Dibrugarh Versus M/s Aluminium Industries (Assam) Pvt. Ltd.

Commr. of Central Excise, Dibrugarh Versus M/s Aluminium Industries (Assam) Pvt. Ltd. - 2013 (297) E.L.T. 399 (Tri. - Kolkata) Issues: Classification of goods under Central Excise Tariff Act, 1985; Benefit under SSI exemption notifications; Allegations of suppression of facts and misdeclaration/misclassification; Approval of Classification List by competent authority; Definition of agricultural produce under Central Excise provisions; Estoppel in taxation matters; Retrospective amendment in Section 11A of the Finance Act, 2002.Classification of goods under Central Excise Tariff Act, 1985:The case involved the classification of Tea Sorting Machine and Tea Extractor Machine under the Central Excise Tariff Act, 1985. The Respondents had classified the goods under Heading No.84.33, attracting a nil rate of duty, and claimed benefits under SSI exemption notifications. The Revenue contended that the goods should be classified under Heading 84.38, alleging misdeclaration and misclassification. The lower Adjudicating Authority dropped the proceedings, leading to the Revenue's appeal. The Respondents argued that they had been clearing the goods at nil rate of duty under Chapter Heading 84.33, with their Classification List approved by the competent authority.Benefit under SSI exemption notifications:The Respondents claimed the benefit of SSI exemption notifications for the goods classified under Heading 84.33. They argued that they had been paying duty accordingly since 01.04.95, and that the goods were rightly classified under 84.33 as agricultural produce, including tea. The Respondents emphasized that their classification had been approved by the competent authority, and the Department had not raised any objections previously.Allegations of suppression of facts and misdeclaration/misclassification:The Revenue alleged suppression of facts and misdeclaration/misclassification by the Respondents, contending that the goods should be classified under Heading 84.38. The Revenue argued that the Assistant Commissioner had found evidence supporting the approved Classification Lists effective from various dates, and the Review Order emphasized the need to establish charges of suppression and misstatement for demanding duty under Section 11A.Approval of Classification List by competent authority:The Review Order highlighted that the Assistant Commissioner's acceptance of the classification should not be altered unless challenged before a higher legal forum and reversed. The Order emphasized that the Department could not change the classification accepted by the proper officer retrospectively, and the adjudicating authority should have considered the retrospective amendment in Section 11A of the Finance Act, 2002.Definition of agricultural produce under Central Excise provisions:The Respondents argued that their goods, including tea, were agricultural produce, and therefore rightly classified under Heading 84.33. They referenced Notification No.08/2004-ST defining agricultural produce to include tea, supporting their classification.Estoppel in taxation matters:The Review Order clarified that there is no estoppel in taxation matters, allowing taxing authorities to change their views for subsequent periods. However, such changes should be prospective and not retrospective, unless challenged and reversed by a higher legal forum.In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, dismissing the Revenue's appeal as lacking merit based on the cogent findings and lack of contradictory evidence. The Tribunal referred to previous cases with similar facts to support their decision, emphasizing the importance of concurrent findings and lack of reason to interfere.