2000 (9) TMI 845 - AT - Central Excise

Dispute over Product Classification under Central Excise Rules - Duty Demand Time-Barred

The case involved a dispute over the classification of products under Central Excise Rules. The appellants manufactured parts for machinery and initially ... Classification list - Approval of Issues:1. Classification of products under Central Excise Rules.2. Bar of limitation for raising demand of duty.3. Approval of classification lists by proper officer.4. Invocation of longer period of limitation.5. Imposition of penalties.Classification of Products under Central Excise Rules:The judgment involves a case where the appellants were engaged in manufacturing parts for lifting and handling machinery. The dispute arose regarding the proper classification of their products under Central Excise Rules. Initially, the appellants sought classification under one heading and later claimed a different classification. The Assistant Commissioner had approved all classification lists submitted by the appellants. The issue was whether the demand of duty raised by the Revenue was correctly classified under the applicable headings.Bar of Limitation for Raising Demand of Duty:The demand of duty was raised for a specific period, and the appellants contended that the demand was barred by limitation. They argued that the approval of classification lists by the proper officer had attained finality, and the Revenue could not now confirm the duty demand for that period under Section 11A of the Central Excise Act, 1944. The appellants cited various decisions to support their contention that the demand was time-barred.Approval of Classification Lists by Proper Officer:The judgment discussed the importance of the proper officer's approval of classification lists. It was highlighted that the officer has the authority and responsibility to verify the correctness of the product description before granting approval. The Tribunal emphasized that the approval of classification lists is not a mere formality and is presumed to be granted after due diligence and verification. The Revenue was expected to make necessary inquiries if any doubts arose during the approval process.Invocation of Longer Period of Limitation:The Commissioner invoked a longer period of limitation based on the alleged deliberate misstatement by the appellants regarding the description of their products. The Commissioner observed that the appellants did not provide specifications and drawings of the goods, leading to misdeclaration. This deliberate act was cited as justification for invoking the longer period of limitation for confirming the duty demand.Imposition of Penalties:The judgment addressed the imposition of penalties on the appellants. As the appeal regarding the duty demand was allowed in favor of the appellants, the penalties imposed were also set aside. The Tribunal concluded that since the duty demand itself was not sustainable due to the bar of limitation, there was no justification for imposing penalties on the appellants. The impugned order was set aside, and the appeals were allowed with consequential reliefs granted to the appellants.