Sugar syrup classification under Heading 1702 and extended limitation upheld where manufacturing activity was not disclosed.

A liquid sugar solution made by dissolving sugar in water and heating it, without added flavouring or colouring matter, was treated as sugar syrup or other sugars under Heading 1702 rather than sugar in solid form under Heading 1701, and was therefore liable to central excise duty. The product was also held marketable on the record. On limitation, non-disclosure of the manufacturing activity to the department justified invocation of the extended period under Section 11A, so the demand was not time-barred.

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Issues: (i) Whether the sugar solution manufactured by dissolving sugar in water and heating it, without added flavouring or colouring matter, was classifiable under Heading 1701 or Heading 1702 of the Central Excise Tariff Act, 1985 and was exigible to duty; (ii) Whether the demand was barred by limitation under Section 11A of the Central Excise Act, 1944.

Issue (i): Whether the sugar solution manufactured by dissolving sugar in water and heating it, without added flavouring or colouring matter, was classifiable under Heading 1701 or Heading 1702 of the Central Excise Tariff Act, 1985 and was exigible to duty.

Analysis: Heading 1701 covers sugar only in solid form, while Heading 1702 covers other sugars in any form and sugar syrups not containing added flavouring or colouring matter. Note 2 to Chapter 17 is confined to sugar falling under Heading 1701. As the product was in liquid form, it could not fall under Heading 1701. It answered the description of sugar syrup or other sugars under Heading 1702, and the product was marketable.

Conclusion: The product was classifiable under Heading 1702 and was liable to central excise duty. This issue is decided against the assessee.

Issue (ii): Whether the demand was barred by limitation under Section 11A of the Central Excise Act, 1944.

Analysis: The record showed non-disclosure of the manufacturing activity to the department. In the absence of a bona fide contrary view or disclosure, the extended period was attracted and the demand could not be treated as time-barred.

Conclusion: The demand was within limitation and not barred by time. This issue is decided against the assessee.

Final Conclusion: The classification adopted by the department was sustained, the limitation defence failed, and the impugned order was upheld in full.

Ratio Decidendi: A liquid sugar solution obtained by dissolving sugar in water and having no added flavouring or colouring matter falls under Heading 1702 of the Central Excise Tariff Act, 1985, and suppression of the manufacturing activity justifies invocation of the extended limitation period under Section 11A of the Central Excise Act, 1944.

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