2003 (4) TMI 453 - AT - Central Excise

Summary

Issues:
1. Classification of speedometers under Chapter Heading 87.14 or 90.29.
2. Invocation of the extended period of limitation for raising the duty demand.

Classification Issue Analysis:
The appellants manufactured speedometers for various two-wheelers and classified them under Chapter Heading 90.29. The Department contended that speedometers for specific vehicles should be classified under Heading 87.14. The Audit party objected to the classification, leading to a duty demand of Rs. 47,31,486. The Commissioner upheld this classification. The appellants argued for Heading 90.29, while the Department insisted on 87.14.

Extended Period of Limitation Issue Analysis:
The show cause notice was issued after the normal limitation period, invoking the extended period due to alleged misdeclaration by the appellants. However, the appellants had consistently declared the speedometers under Heading 90.29, which was accepted by the Department without objection. The Department's knowledge of the nature of the products and lack of evidence of intentional withholding of information led to the conclusion that the extended period could not be invoked.

Legal Precedents and Rulings:
The judgment referenced legal precedents emphasizing the need for deliberate withholding of information to invoke the extended limitation period. Cases cited highlighted that mere non-disclosure of certain details, when other information was provided, does not constitute suppression. The appellants' consistent declarations and provision of details in returns and invoices supported the argument against invoking the extended period.

Conclusion:
Given the lack of intentional suppression of material facts and the Department's awareness of the nature of the products, the extended limitation period was deemed inapplicable. Consequently, the duty demand was considered time-barred, leading to the setting aside of the Commissioner's order. The classification issue was left open for future consideration, as the limitation issue was sufficient to allow the appeal in favor of the appellants.