1999 (10) TMI 143 - AT - Central Excise

Tribunal dismisses Revenue appeal over charges dropped by Commissioner, expert testimony crucial

The Tribunal dismissed the Revenue's appeal against the dropping of charges by the Commissioner. Expert testimonies and lack of substantial proof led to ... Laminations and cores - Transformer cores Issues:1. Appellant appealing against dropping of charge by Commissioner regarding clearing electrical laminations as transformer cores.2. Dispute over duty rate reduction from 20% to 5% on goods under Tariff sub-heading 8504.00.3. Allegation of respondents declaring electrical laminations as transformer cores to evade duty.4. Reliance on statement of a non-expert employee by Revenue.5. Testimony of expert witnesses regarding the difference between laminations and cores.6. Examination of goods by expert to determine their description.7. Decision on appeal based on evidence presented.Analysis:1. The appeal was filed by the Revenue against the dropping of charges by the Commissioner, alleging that the respondents were clearing electrical laminations as transformer cores to evade duty. The Revenue argued that the respondents started declaring their electrical laminations as transformer cores after a duty rate reduction from 20% to 5% on goods falling under Tariff sub-heading 8504.00. It was noted that prior to this change, there were no sales of transformer cores by the respondents, but during the relevant period, a significant portion of their sales constituted transformer cores.2. The Revenue heavily relied on the statement of a non-expert employee, Shri Manoj Kumar, to support their claim that the respondents were misdeclaring their products. However, the respondents contested this by pointing out that Shri Manoj Kumar was not qualified to differentiate between laminations and cores, as his role was limited to administrative tasks and not related to excise work.3. The respondents presented two expert witnesses, Shri Arjun Singh and Shri N. Ramaswamy, who testified that electrical laminations and transformer cores are distinct goods. They explained that when laminations are systematically arranged and assembled, they form transformer cores. This testimony supported the respondents' argument that they were indeed manufacturing and selling transformer cores, not misrepresenting electrical laminations.4. The Tribunal observed that the Revenue failed to investigate the use of the goods cleared by the respondents with their customers. The orders placed by customers were specifically for transformer cores, and there was no evidence to suggest that the goods were being misused or misrepresented. Additionally, the expert witnesses provided detailed explanations on the manufacturing process and usage of transformer cores, further strengthening the respondents' case.5. It was highlighted that the Revenue did not seek expert examination of the goods seized during the visit to determine their nature and description. The Panchnama prepared during the visit indicated that the laminations were arranged in a manner typical of transformer cores, further supporting the respondents' position.6. Ultimately, the Tribunal found no merit in the Revenue's appeal and dismissed it based on the evidence presented, including the expert testimonies and the lack of substantial proof to substantiate the allegations of misdeclaration. The decision was made after thorough consideration of all arguments and evidence from both sides, emphasizing the importance of expert opinions and proper investigation in such cases.