2000 (3) TMI 238 - AT - Central Excise

Assessee unit penalty partially waived in tariff classification dispute, expert opinions crucial

The original duty confirmation and penalty imposition against the assessee unit were upheld but with a waiver of the remaining penalty amount granted. The ... Classification of goods Issues:1. Confirmation of duty against the assessee unit and imposition of penalty.2. Classification of the product under the Central Excise Tariff Act.3. Reliance on expert opinion versus departmental chemical experts' opinion.4. Lack of consideration of expert opinion by lower authorities.5. Need for re-examination and remand of the issue.Issue 1 - Confirmation of Duty and Imposition of Penalty:The original proceedings confirmed duty against the assessee unit and imposed a penalty, which was upheld by the Commissioner. The appeals were filed challenging this order, and a waiver of the remaining penalty amount was granted after considering the issues involved.Issue 2 - Classification of the Product:The dispute centered around the classification of 'Microcellular Rubber Sheets for Footwear' manufactured by the assessee unit under the Central Excise Tariff Act. The Deputy Chief Chemist's report classified the product as 'Cellular Sheets made of Cellular Plastic-Polyethylene,' while the assessees claimed it was rubber. The Commissioner upheld the lower order, emphasizing the failure of the assessees to request retesting within the stipulated timeframe.Issue 3 - Expert Opinion vs. Departmental Opinion:The judgment highlighted the importance of expert opinion in cases involving chemical parameters for classification. The Tribunal found fault with the lower authorities for disregarding the expert opinion of Professor Pandya in favor of the departmental chemical experts' opinion. The Tribunal emphasized the need to consider expert opinions in such cases.Issue 4 - Lack of Consideration of Expert Opinion:Both the Assistant Commissioner and the Commissioner predominantly relied on the departmental test report, neglecting the comprehensive opinion provided by an independent expert, Professor Pandya. The Tribunal criticized this approach and noted that the failure to appreciate the expert opinion warranted a successful appeal.Issue 5 - Re-examination and Remand:The Tribunal allowed the appeals and remitted the proceedings back to the Assistant Commissioner for a thorough re-examination. It was directed that a visit to the assessee's factory be organized with the participation of both the Dy. Chief Chemist and the independent chemical experts of the assessees. The Assistant Commissioner was instructed to provide a detailed report and allow the assessees to present their case before determining the correct classification of the goods.In conclusion, the judgment highlighted the significance of expert opinions in cases involving technical classifications and criticized the lower authorities for disregarding such opinions. The decision to remand the issue for re-examination underscored the importance of a comprehensive assessment based on expert insights and thorough examination of the manufacturing process.