2003 (5) TMI 412 - AT - Central Excise

Summary

Issues:
1. Whether the extended period of time-limit under Section 11A(1) of the Central Excise Act is applicable for demanding duty.
2. Classification of products under Central Excise Tariff Act.
3. Allegations of suppression of facts or misstatement by the taxpayer.
4. Exemption under Notification No. 70/95-C.E.
5. Verification of facts by the Central Excise authorities.

Issue 1: Extended time-limit under Section 11A(1) of the Central Excise Act:
The appeal raised the question of whether the extended time-limit under Section 11A(1) of the Central Excise Act could be invoked for demanding duty from the taxpayer, M/s. 20 Microns Ltd. The Revenue argued that the extended time-limit was applicable due to alleged misstatements by the taxpayer in their declaration regarding the classification of goods and exemption claimed.

Issue 2: Classification of products under Central Excise Tariff Act:
The Additional Commissioner classified the products of M/s. 20 Microns Ltd. under a different sub-heading of the Schedule to the Central Excise Tariff Act, leading to a demand for duty and imposition of penalties. However, the Commissioner (Appeals) set aside the demand as time-barred, emphasizing the importance of immediate objection by the Department upon receipt of the declaration.

Issue 3: Allegations of suppression of facts or misstatement:
The Revenue contended that the taxpayer had not correctly disclosed the full description of the goods manufactured, particularly regarding the coating of micronised minerals. The Department argued that the coating process resulted in distinct commodities with different properties, justifying the invocation of the extended time-limit for demanding duty.

Issue 4: Exemption under Notification No. 70/95-C.E.:
The taxpayer availed exemption under Notification No. 70/95-C.E. by classifying their products under Heading 25.05. The Commissioner (Appeals) noted that if the Department had objections to the classification or exemption claimed, these should have been raised immediately after the receipt of the declaration.

Issue 5: Verification of facts by Central Excise authorities:
The Tribunal observed that the purpose of filing a declaration under Rule 174 of the Central Excise Rules was to inform the Department about the products manufactured and the processes employed. It was noted that the Department had not verified the facts stated in the declaration promptly, leading to the conclusion that the demand for duty was time-barred.

In conclusion, the Tribunal rejected the appeal, agreeing with the findings of the Commissioner (Appeals) that the demand for duty was time-barred. The judgment emphasized the importance of immediate verification of facts by the Department upon receipt of declarations to prevent disputes regarding classification and exemption claims.