1999 (5) TMI 125 - AT - Central Excise

Classification dispute resolved in favor of appellants regarding water pump bearings; duty demand deemed unsustainable.

The Tribunal allowed the appeal in a case concerning the classification of water pump bearings. The appellants had classified the goods under sub-heading ... Demand - Limitation Issues: Classification of water pump bearings under sub-heading 8485.90, alleged misdeclaration, suppression of true nature, demand of duty for the period March 1988 to December 1991.In this case, the appellants manufactured water pump bearings and classified them under sub-heading 8485.90. A Show Cause Notice alleged that these goods were actually parts of water pumps for automobiles and should be classified under sub-heading 8708.00 as per Note 1(k) of Section XVI of the C.E.T.A, 1985. The notice claimed that the appellants wilfully misdeclared the product and suppressed its true nature, demanding duty for the period from March 1988 to December 1991. The Collector upheld the charges and confirmed the duty amount but did not impose a penalty, leading to the present appeal.The history of the classification of the disputed products was presented, showing that the statement about making Anti-friction assemblies for automobiles/tractors had been consistently mentioned in the balance sheets of the company for several years. Previous show cause notices and adjudication orders were also reviewed, indicating a long-standing debate on the classification of the goods. It was noted that the allegations of suppression made in the current show cause notice did not hold, as the department had been aware of the product's identity and had considered various classifications over time. The allegation of misrepresentation with intent to evade duty was deemed unsustainable, as the descriptions were consistent in previous balance sheets as well.The Tribunal found that the department had always been aware of the product's identity and had considered multiple classification options, including the one upheld by the Collector in the present order. Due to the consistent description of the product in previous balance sheets and the lack of sustained allegations of misrepresentation or suppression, the demand confirmed in the impugned order was deemed unsustainable. The appeal was allowed based on the limitation issue alone, and the classification merits were not discussed in detail.