2002 (2) TMI 368 - AT - Central Excise

Summary

Issues:
Classification of Helmet Locking Device under Central Excise Tariff Act - Heading 83.01 or Heading 87.14
Time limit for demanding Central Excise duty

Classification Issue:
The appeal involved the classification of a Helmet Locking Device by M/s. Studds Ltd. under Heading 83.01 or Heading 87.14 of the Central Excise Tariff Act. The Appellants initially classified the product under Heading 83.01 but later suggested it should be classified as an article of plastics. The Department informed them that the product falls under Heading 83.01 as it contains base metal components. The Department later sought to classify it under Heading 87.14, which covers parts and accessories of vehicles. The Appellants argued that the metal lock imparted the essential character to the product, making it classifiable under Heading 83.01. The Department contended that the product was specifically intended for use with two-wheelers, thus falling under Heading 87.14 as an accessory. The Tribunal upheld the classification under Heading 87.14, as the product was exclusively for locking helmets onto two-wheelers, meeting the conditions of the Tariff. However, the Tribunal found the demand for duty time-barred due to a new notice issued beyond the statutory limit.

Time Limit Issue:
Regarding the time limit for demanding Central Excise duty, the Tribunal noted that the original show cause notice was issued on 2-2-1990 demanding duty based on a different classification. A corrigendum on 14-9-1990 changed the classification and increased the duty amount. The Tribunal considered the corrigendum as a new show cause notice, altering the grounds for demanding duty. As the corrigendum was issued beyond the six-month limit specified in Section 11A(1) of the Central Excise Act, the Tribunal ruled the entire demand as time-barred. Consequently, the Tribunal set aside the demand for Central Excise duty based on the time limit issue.

In conclusion, the Appellate Tribunal CEGAT, New Delhi addressed the classification issue of the Helmet Locking Device under the Central Excise Tariff Act, ruling in favor of classification under Heading 87.14. Additionally, the Tribunal resolved the time limit issue by deeming the corrigendum as a new show cause notice, leading to the demand for Central Excise duty being considered time-barred and subsequently set aside.