2003 (2) TMI 366 - AT - Central Excise

Summary

Issues:
1. Limitation period for raising duty demand based on misclassification of goods.

Analysis:
The case involved an appeal concerning the limitation period for raising a duty demand based on the misclassification of goods. The appellants were issued a show cause notice raising a demand of duty for a specific period, alleging that the motor vehicle parts manufactured by them were misclassified. The appellants contended that they had been filing classification lists claiming classification under a particular heading, which was approved by the proper officer. However, during the relevant period, the rules changed, and declarations were required instead of classification lists. The Commissioner invoked the extended period of limitation, alleging misdeclaration in the classification of the products.

The Commissioner's order raised the issue of whether the extended period of limitation was correctly invoked under the Central Excise Act, 1944. The noticee argued that they had been regularly submitting declarations classifying their products under a specific heading, which was acknowledged by the department without any objections. They contended that there was no misdeclaration or suppression of facts that could justify invoking the extended period. The Commissioner found that the noticee had indeed made misdeclarations in the declarations filed under Rule 173B, leading to the suppression of facts with the intent to evade duty payment.

Upon review, the appellate tribunal found that the appellants had indeed filed declarations during the period in question, claiming classification under a specific chapter. The tribunal noted that the appellants had declared the classification based on their understanding, and the Revenue had the authority to challenge the classification through proper procedures if deemed incorrect. It was observed that there was no suppression of facts by the appellants, and the notice issued after the normal limitation period of six months was deemed time-barred. Consequently, the tribunal set aside the impugned order solely on the grounds of time limitation, without delving into the merits of the case, and allowed the appeal in favor of the appellants.