2008 (8) TMI 112 - AT - Central Excise

Tribunal classifies ABS resins as 'ABS ter-polymers,' rejects extended limitation period

BHANSALI ENGG. POLYMERS LTD. Versus COMMISSIONER OF C. EX., BHOPAL

The Tribunal classified the ABS resins under sub-heading 3903.30 as 'ABS ter-polymers' in favor of the Appellant. It held that the extended period of ... Whether various grades of “ABS resins” are classifiable u/sh 3903.30 as “ABS ter-polymers”, as claimed by the Appellant, or u/sh 3903.90 as – “other polymers of styrene, in primary form” - various grades of ABS polymers which are made by blending ABS ter-polymers with other polymers are basically ABS polymers, and the same would be classifiable under sub-heading 3903.30 only – no wilful misstatement or suppression of facts - extended period under proviso to Section 11A (1) is not invokable Issues involved:Classification of ABS resins under tariff sub-headings, applicability of extended period of limitation under Section 11A (1) of the Central Excise Act.Analysis:1. Classification of ABS resins:The main issue in this appeal was the classification of various grades of ABS resins manufactured by the Appellant. The Appellant claimed that the ABS resins should be classified under sub-heading 3903.30 as 'ABS ter-polymers,' while the Commissioner classified them under sub-heading 3903.90 as 'other polymers of styrene.' The Appellant argued that their products should be classified as ABS ter-polymers under sub-heading 3903.30 since the predominant part of the composition is ABS, and they have been manufacturing these products since 1989 with consistent classification declarations and returns supporting their claim. The Departmental Representative contended that the products should be classified as 'other polymers' under sub-heading 3903.90 due to the addition of branch-chains like polycarbonates and chlorinated polyethylene. The Tribunal analyzed the manufacturing process and the composition of the products to determine the correct classification.2. Applicability of extended period of limitation:Another crucial issue was the invocation of the extended period of limitation under proviso to Section 11A (1) of the Central Excise Act for demanding allegedly short-paid duty. The show cause notice was issued for the period from April 1996 to February 1997 and from June 1998 to February 2000. The Appellant argued that the extended limitation period was not applicable as there was no wilful misstatement or suppression of facts on their part. They provided detailed information in their classification declarations, RT-12 returns, and Modvat declarations, which showed transparency in their manufacturing process. The Tribunal examined the evidence presented by both sides to determine whether the extended period of limitation was correctly invoked by the Revenue.Conclusion:After considering the submissions from both sides, the Tribunal found that the Appellant's products should be classified under sub-heading 3903.30 as ABS ter-polymers based on the manufacturing process and the composition of the products. The Tribunal also concluded that the extended period of limitation under Section 11A (1) was not applicable as there was no wilful misstatement or suppression of facts by the Appellant. Therefore, the impugned order of the Commissioner was set aside, and the appeal was allowed in favor of the Appellant.This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by both parties, and the Tribunal's reasoning leading to the final decision.