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of <h1>Tribunal Drops Extended Penalty, Upholds Standard Excise Duty Demand with Interest.</h1> <h3>M/s Mehrotra Industries Versus Commissioner of Central Excise II, Kolkata</h3> M/s Mehrotra Industries Versus Commissioner of Central Excise II, Kolkata - TMI 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.
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