2004 (6) TMI 386 - AT - Central Excise

Summary

Issues:
Classification of 'framed mirrors' for duty determination; Allegation of suppression of manufacturing process; Imposition of penalties and interest; Bar of limitation for duty demands.

Classification Issue:
The appellants were issued a show cause notice for not properly classifying 'framed mirrors' under the correct heading, leading to duty evasion. The Commissioner (Appeals) determined that 'Framed Glass Mirrors' fall under Heading 7006.90 and are chargeable to duty. The appellants had deliberately misdeclared the goods as non-excisable, misleading the department. The misdeclaration and suppression of facts resulted in non-levy of duty, justifying the demand made. The appeal was rejected, upholding the lower authority's decision.

Suppression of Manufacturing Process:
The appellants failed to disclose the manufacturing process of 'framed mirrors,' leading to the allegation of suppression. Despite being aware of the Central Excise Rules, they deliberately misdeclared the goods as non-excisable, creating a false impression of trading activity. The deliberate omission of mentioning the manufacturing process in the correct category misled the department, justifying the duty demand. The Commissioner found no merit in the appellant's contention of time-barring the show cause notices.

Penalties and Interest Imposition:
The lower authorities confirmed the duty demand and imposed penalties under Section 11AC, along with interest under Section 11AB. The Commissioner upheld the penalties and interest, emphasizing the intentional misdeclaration and suppression of facts by the appellants. The penalties and interest were deemed justified based on the deliberate actions of the appellants.

Bar of Limitation Issue:
The appellants raised a plea of bar of limitation, citing past instances where duty payment was stopped based on previous orders. The Range Superintendent and Additional Commissioner had issued notices and made classifications, creating confusion regarding the correct classification of 'framed mirrors.' The plea of bar of limitation was found to have force, as past actions by the department indicated awareness of the manufacturing process. The show cause notice demanding duty for a specific period was considered time-barred, leading to the setting aside of the order and allowing the appeal.

In conclusion, the judgment addressed the correct classification of 'framed mirrors,' the allegation of suppression of manufacturing process, imposition of penalties and interest, and the bar of limitation for duty demands. The decision upheld duty demands based on deliberate misdeclaration and suppression, while also considering the plea of bar of limitation in favor of the appellants, leading to the setting aside of the order and allowing the appeal.