1998 (3) TMI 629 - AT - Central Excise

Summary

Issues:
1. Interpretation of Central Excise Tariff regarding wire rope slings.
2. Correct assessment of duty on wire rope slings.
3. Validity of show cause notice issued by Assistant Commissioner.
4. Time-barred nature of the show cause notice.
5. Allegations of wilful misstatement or suppression of facts.

Issue 1: Interpretation of Central Excise Tariff regarding wire rope slings
The case involved a dispute over the classification of wire rope slings under the Central Excise Tariff. Initially, a Trade Notice clarified that wire rope slings made from wire ropes should be assessed under the same Tariff Item 63. The notice specified that the levy applied only to wire ropes and not to fittings like hooks or sockets. However, a subsequent Trade Notice did not address the valuation of wire rope slings, leading to confusion. The appellants argued that they paid duty based on the value of wire ropes only, excluding the fittings, in line with the initial Trade Notice.

Issue 2: Correct assessment of duty on wire rope slings
The appellants contended that no duty should be charged on wire rope slings, as the duty paid on the value of wire ropes complied with Tariff Item 63. They maintained that their method of duty payment, as per the Trade Notice of 1973, was known to the authorities and did not involve any concealment of facts regarding duty calculation.

Issue 3: Validity of show cause notice issued by Assistant Commissioner
A show cause notice was issued by the Assistant Commissioner for the recovery of duty, alleging incorrect duty payment by the appellants. The appellants raised a preliminary objection, arguing that the notice should have been issued by the Commissioner of Central Excise due to the extended period invoked under Section 11A. The issue of the notice's validity was a crucial aspect of the case.

Issue 4: Time-barred nature of the show cause notice
The appellants contended that the show cause notice issued in 1986 was time-barred, as it exceeded the six-month limitation period stipulated under Section 11A. They argued that the notice was not issued by a competent officer initially and was rectified only in 1989. The appellants maintained that the demand for duty was barred by time, and therefore, the payment of duty should be set aside.

Issue 5: Allegations of wilful misstatement or suppression of facts
The Revenue argued that the duty payment method of the appellants did not clarify that the cost of fittings should not be added to the value of slings. However, the Tribunal found the Revenue's argument incomprehensive, stating that the method of clearing slings with fitments was evident from the documents provided by the appellants. The Tribunal concluded that no wilful misstatement or suppression of facts could be alleged against the appellants, and the demand for duty was time-barred under Section 11A.

In conclusion, the Tribunal held that the demand for duty was barred by time and set aside the payment of duty, disposing of the appeal accordingly.