Classification of compensating and thermocouple cables under Heading 90.25 upheld; undervaluation demand failed on merits and limitation.

Compensating cables and thermocouple cables were held classifiable under Heading 90.25, consistent with the later Larger Bench view, so the Revenue's Chapter 85 classification failed. The undervaluation demand also failed because the finding that the assessee and the other concern were not related persons remained undisturbed, and the demand was barred by limitation. On both issues, the impugned order was sustained and the Revenue's appeal failed in full.

---

---

Issues: (i) Whether compensating cables/thermocouple cables were correctly classifiable under Chapter 85 of the Central Excise Tariff Act, 1985 or under Heading 90.25; (ii) Whether the demand based on undervaluation was sustainable on merits and limitation.

Issue (i): Whether compensating cables/thermocouple cables were correctly classifiable under Chapter 85 of the Central Excise Tariff Act, 1985 or under Heading 90.25.

Analysis: The classification adopted by the Revenue under Chapter 85 was tested against the later Larger Bench ruling which overruled the earlier contrary view and held compensating cables/thermocouple cables to fall under Heading 90.25. In view of that binding larger bench decision, the earlier basis urged by the Revenue could not survive.

Conclusion: The Revenue's claim for classification under Chapter 85 was rejected and the assessee's classification was accepted.

Issue (ii): Whether the demand based on undervaluation was sustainable on merits and limitation.

Analysis: The finding of the Commissioner that the assessee and the other concern were not related persons was not effectively dislodged. The Revenue also did not challenge the conclusion that the demand on this ground was barred by limitation. On both merits and limitation, the undervaluation allegation failed.

Conclusion: The demand on the ground of undervaluation was not sustainable.

Final Conclusion: The impugned order was sustained and the Revenue's appeal failed in its entirety.

Ratio Decidendi: Compensating cables/thermocouple cables fall for classification under Heading 90.25, and a duty demand alleging undervaluation cannot stand where the finding on non-related person status remains undisturbed and the demand is barred by limitation.

---