2006 (5) TMI 208 - AT - Central Excise

Summary

Issues Involved:
1. Classification of goods as articles of Chromium under SH 8112.00 of the CETA Schedule.
2. Applicability of the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act for the demand of duty.

Issue-wise Detailed Analysis:

1. Classification of Goods:
The Ld. Commissioner of Central Excise classified the goods in question as articles of Chromium under SH 8112.00 of the CETA Schedule, as claimed by the Revenue. The respondent was engaged in manufacturing cast articles of iron and steel, as well as unmachined steel castings. The department found that the respondent had also manufactured and cleared castings of alloy containing chromium and nickel, predominant by weight over other metals, as cast articles of stainless steel under SH 7325.00. The department argued that the respondent misdeclared the goods' classification with the intent to evade payment of duty. The respondent contended that the goods should be classified under Heading 73.25 per Rules 1 & 3(a) of the Interpretative Rules and that their classification list had been approved by the department, negating any intent to evade duty.

2. Applicability of Extended Period of Limitation:
The main contention in the appeal was whether the extended period of limitation under the proviso to Section 11A(1) of the Central Excise Act was invocable. The Ld. Commissioner held that the demand of duty raised in the SCN dated 8-2-95 for goods cleared during 19-7-91 to 21-7-93 was time-barred. The department argued that the respondent had suppressed the real identity and composition of the goods with intent to evade duty, warranting the invocation of the extended period of limitation. The respondent countered that the chemical composition of the goods had been furnished along with the classification list, which was approved by the department, and thus there was no suppression of facts.

Judgment:
The Tribunal examined whether the extended period of limitation was applicable. It was shown that the chemical composition of the goods was furnished to the department along with the classification list. The classification lists were approved, and RT 12 returns were assessed without objection, indicating that the department was aware of the material facts. The Tribunal found that the department did not dispute the percentage of chromium reported by the assessee and did not draw samples for independent testing. The Tribunal concluded that the respondent did not suppress any facts and that the extended period of limitation under the proviso to Section 11A(1) was not invocable. The Tribunal sustained the impugned order and dismissed the Revenue's appeal.

Conclusion:
The appeal by the Revenue was dismissed, and the Tribunal upheld the Ld. Commissioner's decision that the extended period of limitation was not applicable. The classification of goods as articles of Chromium under SH 8112.00 was accepted, but there was no suppression of facts by the respondent, negating the invocation of the extended period for duty demand.