2005 (5) TMI 417 - AT - Central Excise

Summary

Issues: Classification of goods under Central Excise Tariff Act, 1985; Time limitation for demand of duty.

Classification Issue:
The appeal concerned the classification of CD towers and audio cassette stands under Chapter heading 94.03 of the Central Excise Tariff Act, 1985. The Commissioner of Central Excise (Appeals) had upheld the adjudication order passed by the Additional Commissioner, which classified the items under Chapter 94.03, imposing a demand, interest, penalty, and confiscation. The appellants contended that the goods should be classified under Chapter 39 as household articles of plastics. The Tribunal analyzed the notes to Chapter 94 and the HSN Explanatory notes, noting that the items in dispute were not designed for placing on the floor or ground, as required by Note 2 to Chapter 94. The Tribunal rejected the argument that the items could be classified under 94.03 based on their design to stand on other furniture, as they did not fit the description of cupboards, bookcases, or shelved furniture. Consequently, the Tribunal accepted the classification claimed by the appellants under CET sub-heading 3924.90.

Time Limitation Issue:
The Tribunal also addressed the issue of time limitation for the demand of duty. It observed that the department had not made necessary inquiries when the appellants declared the products as household articles of plastics falling under Chapter 39. Since the items were made of plastic and used in households, the Tribunal held that there was no wilful suppression or misstatement of facts by the appellants to evade duty payment. As a result, the demand was considered time-barred. Therefore, the Tribunal concluded that the demand was not sustainable on the grounds of both classification and time limitation. The impugned order was set aside, and the appeal was allowed in favor of the appellants.