2012 (12) TMI 44 - AT - Central Excise

CESTAT Chennai: Metal Halide Light Exposing System case ruling - Classification, Exemption, Limitation, and Penalty

The Appellate Tribunal CESTAT, CHENNAI ruled in favor of the appellants in a case concerning the classification of Metal Halide Light Exposing System for ... Classification of printing plate processor and parts – alleged that adjudicating Commissioner took note of the oral submissions made at the time of personal hearing before her, and has accepted the alternative classification under Heading 8442 prayed for by the appellants themselves – Held that:- Same classification is proper as the legal text under the heading covers machinery, apparatus and equipments for making plates. Parts also technically get classified under the same heading as ordered by the adjudicating Commissioner - goods are classifiable under Heading 8442 and the duty demand would have to be reworked out accordingly As regards the issue of small scale exemption - extended period of limitation - Held that:- Non-declaration of use of other’s brand name despite having knowledge about the same, amounts to suppression - in regard to the demand relating to non-availability of small scale exemption, the extended period of limitation is applicable on the ground of suppression - matter remanded for the limited purpose of re-quantifying the duty demand in this regard to the original authority - penalty imposed under Rule 173Q Issues: Classification of goods, Small scale exemption denial, Extended period of limitationClassification of goods:The impugned order classified Metal Halide Light Exposing System for Offset Printing Plate Making under Heading 9009, while the appellants argued for classification under Heading 8442. The Tribunal ruled in favor of the appellants, stating that the impugned goods are more appropriately classified under Heading 8442, which covers machinery for preparing printing blocks and plates. The printing plate processor and its parts were also classified under Heading 8442. The Tribunal found that the impugned goods were used for making printing plates, supporting the classification under Heading 8442.Small scale exemption denial:The appellants were denied the small scale exemption due to using another brand name. The Tribunal upheld this denial, citing precedents that using a brand name of another disentitles one from the small scale exemption. The appellants argued for exemption on the grounds of bona fide belief, but the Tribunal found that suppression of the brand name usage indicated mala fide intent, justifying the denial of exemption and application of the extended period of limitation.Extended period of limitation:The Tribunal held that the extended period of limitation applied due to the suppression of vital information regarding the use of the brand name of another company on the impugned goods. The Tribunal referenced a case where non-declaration of using another's brand name despite knowledge was considered suppression. As a result, the Tribunal allowed the appeal partly, modifying the classification of the goods under Heading 8442 and remanding the matter for re-quantifying the duty demand. The penalty imposed was upheld as nominal.This detailed analysis covers the classification of goods, denial of small scale exemption, and the application of the extended period of limitation as addressed in the legal judgment by the Appellate Tribunal CESTAT, CHENNAI.