2003 (12) TMI 485 - AT - Central Excise

Summary

Issues:
1. Classification of goods under Chapter Heading 94.03 vs. Chapter 39 of the Central Excise Tariff Act.
2. Extended period of limitation invoked due to suppression of facts by the applicant.
3. Exemption from payment of duty under Notification 4/97 for goods classified under Chapter 39.

Analysis:
1. The primary issue in this case revolves around the classification of goods, specifically plastic CD towers and plastic audio cassette stands, under Chapter Heading 94.03 or Chapter 39 of the Central Excise Tariff Act. The Commissioner (Appeals) classified the goods under Chapter 94, which includes furniture, while the applicant contended that they should be classified under Chapter 39, covering plastics and articles thereof. The department argued that the goods are rightly classifiable as furniture, thus subject to duty. However, the Tribunal found that the applicant's goods, used for storing CDs and cassettes and not placed on the floor but on other furniture pieces, do not qualify as furniture under Chapter 94. The Tribunal supported the applicant's classification under Chapter 39, which exempts them from duty.

2. The second issue pertains to the extended period of limitation invoked by the department due to alleged suppression of facts by the applicant. The Commissioner (Appeals) upheld the extended period, citing misdeclaration of the goods and the use of another person's brand name. However, the Tribunal noted that the applicant had been filing declarations claiming exemption under Notification 4/97 for the relevant products. The Tribunal found that the attempt to classify the goods as furniture to invoke the extended period was incorrect, as the goods fell under Chapter 39. Consequently, the Tribunal ruled in favor of the applicant, waiving the pre-deposit of duty and penalty, and stayed the recovery pending appeal.

3. Lastly, the issue of exemption from payment of duty under Notification 4/97 for goods falling under Chapter 39 was crucial in the Tribunal's decision. The applicant had consistently claimed exemption for the goods in question, which were fully exempted from excise duty if classified under Chapter 39. The Tribunal's analysis focused on the correct classification of the goods to determine their eligibility for the exemption. By establishing that the goods were appropriately classified under Chapter 39 and not Chapter 94, the Tribunal supported the applicant's claim for exemption and ruled in their favor by waiving the pre-deposit and staying the recovery of amounts pending the appeal.