Tribunal classifies roller blinds as excisable goods, rejects service argument, upholds duty demand and penalties

The Tribunal upheld the classification of roller blinds under the Central Excise Tariff, determining them as excisable goods subject to duty payment. It concluded that the installation of roller blinds constitutes manufacturing, not a service, as they are movable property even after installation. The Tribunal also invoked the extended period of limitation for duty demand, rejecting the appellant's arguments. Penalties imposed on the appellant company and its General Manager were deemed appropriate. The appeal was dismissed, affirming the duty demand and penalties.

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Issues Involved:
1. Classification of roller blinds under the Central Excise Tariff.
2. Determination of whether the installation of roller blinds constitutes manufacturing or service.
3. Applicability of excise duty on roller blinds.
4. Invocation of the extended period of limitation for demand of duty.
5. Appropriateness of penalties imposed on the appellant and its General Manager.

Issue-wise Detailed Analysis:

1. Classification of Roller Blinds under the Central Excise Tariff:
The Commissioner, in the de novo adjudication, classified roller/vertical blinds made of fabrics of Chapter 39 under sub-heading 3925 2000, those made out of fabrics of Chapter 52 to 59 under sub-heading 630300, and those of fabrics falling under Chapter 70 under sub-heading 70199000 of the Tariff. The Tribunal upheld this classification, finding that roller blinds, including venetian blinds and similar articles, are specifically included in CETH 39253000 when made out of plastics, and under CETH 630300 and 70199000 when made out of other materials.

2. Determination of Whether the Installation of Roller Blinds Constitutes Manufacturing or Service:
The appellant argued that the installation of roller/vertical blinds should be treated as a service, not manufacturing, as the blinds become part of immovable property once installed. However, the Tribunal noted that the roller blinds come into existence in the factory premises where the fabric is fixed to the aluminum tube, and the motor is inserted in certain cases. These blinds, once installed, can be unbolted and removed, rendering them movable rather than immovable property. Thus, the Tribunal concluded that the process amounts to manufacturing, not merely a service.

3. Applicability of Excise Duty on Roller Blinds:
The Tribunal found that the roller blinds are excisable goods liable to payment of excise duty. The value of the goods for excise duty was determined based on the Central Excise Valuation Rules 2000, using a CAS-4 Certificate issued by a Chartered Accountant. The Tribunal dismissed the appellant's argument that the goods are tailor-made and not marketable, stating that the product is available as per the needs of the buyer, even if not offered on shelves.

4. Invocation of the Extended Period of Limitation for Demand of Duty:
The appellant contended that the demand for duty is time-barred as they were registered for service tax and had disclosed their activities to the department. The Tribunal, agreeing with the adjudicating authority, held that the appellant suppressed the fact of manufacturing blinds from the department and did not take steps to clarify their duty liability. The extended period of limitation under Section 11A (1) was thus invoked correctly.

5. Appropriateness of Penalties Imposed on the Appellant and Its General Manager:
The Tribunal upheld the penalties imposed on the appellant company and its General Manager. The penalty of Rs. 44,66,863/- on the appellant company under Section 11AC and Rs. 5 Lakh on the General Manager was deemed appropriate due to the suppression of facts and failure to register for excise duty despite being aware of the duty liability.

Conclusion:
The Tribunal sustained the impugned order, confirming the duty demand and penalties, and dismissed the appeal filed by the appellant. The Tribunal found no merit in the appellant's arguments regarding the nature of the goods, marketability, and the invocation of the extended period of limitation. The case laws cited by the appellant were deemed inapplicable to the facts of the present case.

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