2023 (1) TMI 296 - AT - Central Excise

Tribunal reverses reclassification of 'Silo' and dismisses duty demand, interest, penalties

M/s. B.G. Shirke Construction Technology Pvt. Ltd. Versus Commissioner of Central Excise, Pune-IV

M/s. B.G. Shirke Construction Technology Pvt. Ltd. Versus Commissioner of Central Excise, Pune-IV - TMI Issues Involved:1. Classification of 'Silo' under the Central Excise Tariff Act, 1985.2. Invocation of the extended period for recovery of duty.3. Imposition of interest and penalties.Issue-wise Detailed Analysis:1. Classification of 'Silo' under the Central Excise Tariff Act, 1985:The primary issue revolves around the correct classification of 'Silo' under the Central Excise Tariff Act, 1985. The appellant classified 'Silo' under Chapter Subheading 84379090, which pertains to 'Machines for cleaning, sorting or grading seed, grain or dried leguminous vegetables; machinery used in the milling industry or for the working of cereals or dried leguminous vegetables, other than farm-type machinery' at Nil rate of duty. The revenue, however, reclassified 'Silo' under Chapter Subheading 94060099, which pertains to 'Prefabricated buildings' under the Central Excise Tariff Act, 1985, attracting a normal rate of duty.The Tribunal examined the relevant chapter headings and notes, both pre and post the introduction of the eight-digit classification code in 2005. It was noted that the terms of heading pre and post-introduction of the eight-digit classification code were not amended or changed in any manner, implying that the classification of goods at the six-digit level remained unchanged. The Tribunal referred to the HSN Explanatory Notes and the classification opinion rendered by the HSN Committee in its 59th Session, which classified similar silos under heading 8479.89, not under prefabricated buildings.The Tribunal also considered the jurisdictional Chief Commissioner's opinion, which supported the appellant's classification under heading 8437, and the fact that the same classification was accepted by the Customs Authorities at Nhava Sheva for export purposes. Based on these findings, the Tribunal concluded that the impugned goods were not classifiable under heading 94060099 but under heading 8437.2. Invocation of the Extended Period for Recovery of Duty:The revenue invoked the extended period for recovery of duty, alleging willful misclassification by the appellant to evade payment of duty. The Tribunal noted that the issue of classification was previously decided by the Tribunal in 1995, and the office of the Chief Commissioner had expressed a consistent opinion post the introduction of the eight-digit classification code. The Tribunal found no new facts or changes in the law that would justify the invocation of the extended period. The Tribunal held that the appellant could not be charged with suppression with intent to evade payment of duty, as the classification issue was already settled and known to the revenue.3. Imposition of Interest and Penalties:The Tribunal, having concluded that the demand for duty was unsustainable, also held that the order for demand of interest and imposition of penalties could not be sustained. The Tribunal emphasized the principle that interest and penalties are consequential to the demand for duty, and since the demand itself was set aside, the associated interest and penalties were also set aside.Conclusion:The Tribunal allowed the appeals, setting aside the impugned orders that reclassified 'Silo' under Chapter Subheading 94060099 and demanded duty, interest, and penalties accordingly. The Tribunal reaffirmed the classification of 'Silo' under Chapter Subheading 84379090, as initially adopted by the appellant.