2024 (11) TMI 1175 - AT - Central Excise

Tribunal Drops Extended Penalty, Upholds Standard Excise Duty Demand with Interest.

The Tribunal concluded that the extended period of limitation was inapplicable due to the appellant's regular filing of ER-1 Returns and classification ... Demand of Excise duty with interest and penalty - mis-classification of products as under Chapter Heading 8707 instead of Chapter Heading 8704 - manufacturing goods for mounting on duty-paid Chassis - benefit of N/N. 6/2006-CE dated 01.03.2006 Sl.No.87 as amended by another N/N. 12/2012-CE dated 17.03.2012 Sl.No.334 - Extended period of limitation - HELD THAT:- In MESSRS DISHA ENGINEERS VERSUS C.C.E. -AHMEDABAD-I [2022 (5) TMI 476 - CESTAT AHMEDABAD] and M/S AMCL MACHINERY LTD VERSUS COMMISSIONER OF CUSTOMS & C. EX. [2019 (8) TMI 250 - CESTAT MUMBAI], the assessee has classified their products under Chapter Heading 8704 and claimed exemption under Notification No.6/2006-CE dated 01.03.2006 Sl.No.87 as amended by another Notification No.12/2012-CE dated 17.03.2012 Sl.No.334, which is not the case in hand. The appellant admittedly classified their products under Chapter 8707 instead of 8704. In that circumstances, the cases relied upon by the ld.Counsel for the appellant, are not applicable to the facts and circumstances of the case. But the appellant agreed upon that as they were filing ER-1 Returns regularly and classified their product under Chapter Heading 8707 claiming exemption Notification No.6/2006-CE dated 01.03.2006 Sl.No.87 as amended by another Notification No.12/2012-CE dated 17.03.2012 Sl.No.334, the extended period of limitation is not invokable. In that circumstances, the extended period of limitation is not invokable in this case. Therefore, the demand pertaining to the extended period of limitation is dropped and in the facts and circumstances of the case, no penalty is imposable on the appellant. The demand pertaining within the limitation is confirmed. Accordingly, the same shall be paid by the appellant along with interest, (if not paid) within 30 days from the date of receipt of this order - No penalty is imposable on the appellant - the appeal is disposed off. Issues:Appeal against demand of Excise Duty, mis-classification of products under Chapter Heading 8707, invocation of extended period of limitation, applicability of exemption notifications, penalty imposition.Analysis:The appellant appealed against an order confirming a demand of Excise Duty, interest, and penalty. The appellant, engaged in manufacturing goods for mounting on duty-paid Chassis, mis-classified their products under Chapter Heading 8707 instead of 8704. The appellant claimed exemption under Notification No.6/2006-CE but was investigated for mis-classification. Show-cause notices were issued invoking the extended period of limitation. Despite contesting the issue on merit and limitation, the demand was confirmed. The appellant argued that as they filed ER-1 Returns regularly and availed exemption, the extended period of limitation should not apply.On merit, the appellant cited precedents supporting their position, but the Revenue argued for classification under Chapter Heading 8704. The Tribunal noted that the cases cited by the appellant involved classification under 8704, unlike the present case where products were classified under 8707. However, the Tribunal agreed that the extended period of limitation should not apply due to the regular filing of ER-1 Returns and classification under Chapter Heading 8707 for exemption purposes.Consequently, the Tribunal held that the extended period of limitation was not applicable, leading to the dropping of the demand related to the extended period and no imposition of penalty on the appellant. The order confirmed the demand within the limitation period, requiring payment by the appellant along with interest, and stated that no penalty was imposable. The appeal was disposed of accordingly.