2002 (4) TMI 347 - AT - Central Excise

Summary

Issues:
Classification of product caps under CH 6201.00 or CH 6501.80 of the CETA, Time-barred duty demand raised against the appellants.

Classification of Product Caps:
The appeal involved a dispute over the classification of caps manufactured by the appellants under CH 6201.00 as articles of apparel or CH 6501.80 as headgear. The Revenue argued for classification under CH 6501.80, while the appellants contended for CH 6201.00 based on a previous case law. The Tribunal analyzed the changes in the tariff structure post the introduction of the new Tariff of 1985 and the HSN, emphasizing that caps fall under Chapter 65 as headgear, not Chapter 62. The Explanatory notes to Chapters 62 and 65 of HSN supported the classification of caps under Chapter 65. The Tribunal upheld the classification of caps under CH 6501.80, rejecting the appellants' plea for CH 6201.00.

Time-barred Duty Demand:
Regarding the duty demand raised against the appellants, the issue of the extended period of limitation was raised. The appellants argued that the demand was time-barred as they believed their product was classified under Chapter 62 and exempt from duty. The Tribunal considered the Commissioner (Appeals) observations and legal precedents to determine if there was willful suppression of facts by the appellants. The Tribunal concluded that there was no evidence of suppression, fraud, or collusion by the appellants to evade duty, thus accepting their plea of limitation. The duty demand for the disputed period was held to be time-barred, and the penalty against the appellants was set aside.

In conclusion, the Tribunal confirmed the classification of the product caps under CH 6501.80 but set aside the duty confirmation and penalty, ruling them as time-barred. The appeal was disposed of in favor of the appellants on the issue of the duty demand for the disputed period.