1999 (8) TMI 756 - AT - Central Excise

Summary

Issues:
Classification of goods under Chapter 46, issuance of show cause notice, suppression allegations, duty demand period, competence of show cause notice, time-barred demand.

Classification of Goods under Chapter 46:
The appellants, who manufactured polypropylene mats, initially claimed classification under TH 3922.90 with a duty exemption. The Department later sought to change this classification to Chapter 46. The Collector (Appeals) directed the Assistant Collector to issue a fresh show cause notice for the new classification. The Assistant Collector, instead of doing so, treated his earlier order as a show cause notice, which was challenged by the appellants. The Collector (Appeals) upheld the communication as a show cause notice. The Revenue did not appeal this decision, making it final. The Tribunal noted that the Revenue should have issued a fresh show cause notice as per Section 11A of the Act. The appeal was allowed, and the impugned order was quashed.

Issuance of Show Cause Notice and Allegations of Suppression:
The Assistant Collector issued a show cause notice proposing a duty demand for the period under the assumed classification. The appellants argued that the notice was not competent as it did not follow the proper procedure and alleged suppression. The Collector (Appeals) set aside the Assistant Collector's order and directed the competent officer to issue a proper show cause notice. However, the concerned Collector decided the old notice based on a Trade Notice, leading to the confirmation of the duty demand. The Tribunal held that the show cause notice was not competent as per Section 11A and should have been issued by the Collector. The appeal was allowed, and the impugned order was quashed.

Time-Barred Demand and Change in Classification Notice:
The appellants contended that the demand for duty was time-barred as they were informed about the change in classification to Chapter 46 only on 14-3-1989. They argued that suppression allegations were baseless as they had an approved classification earlier and had corresponded with the Revenue about the classification list. The Tribunal agreed that the demand was time-barred and suppression allegations were not valid. The appeal was allowed, and the impugned order was set aside with consequential relief to the appellants.