2006 (1) TMI 423 - AT - Central Excise

Summary

Issues:
Classification under Notification No. 64/88 for Cement Concrete Building Blocks; Provisional approval of classification lists; Interpretation of Notification for benefit extension; Amendment of Notification by Finance Act, 1997; Limitation period for demands; Penalties imposition.

Classification under Notification No. 64/88 for Cement Concrete Building Blocks:
The appellant, engaged in manufacturing Cement Concrete Building Blocks, claimed classification under Heading 68.07 with the benefit of Notification No. 64/88 providing concessional duty rates for certain products. Dispute arose regarding the availability of the notification to the appellant's product, leading to provisional approval of classification lists post-1991. The Commissioner (Appeals) initially ruled in favor of the appellant, but subsequent show cause notices challenged this classification.

Interpretation of Notification for benefit extension:
The appellant contended that their blocks could be considered components of pre-fabricated buildings, thus eligible for the notification's benefits. However, the Tribunal and the Supreme Court held that the blocks were not entitled to the exemption as they were used in masonry work and not as intermediates or components of pre-fabricated buildings. The Supreme Court's decision in a similar case was binding, rejecting the appellant's claim for benefit extension.

Amendment of Notification by Finance Act, 1997:
The appellant argued that an amendment to the notification broadened its scope to include goods "of a kind used in pre-fabricated buildings." However, the Tribunal found that the appellant's blocks, used in construction of walls/buildings, did not qualify as components or intermediates of pre-fabricated buildings, as per the Supreme Court's interpretation. The amendment did not support the appellant's case.

Limitation period for demands and Penalties imposition:
The Commissioner adjudicated show cause notices invoking both normal and longer periods of limitation. Where classification was provisionally approved, limitation did not apply. However, demands under longer limitation periods were held to be time-barred as the appellant did not suppress facts or misstate with an intent to evade duty. Penalties were set aside due to lack of justification. The Commissioner was directed to quantify demands within the normal limitation period.

In conclusion, the benefit of Notification No. 64/88 was rightly denied to the appellant, demands were to be confirmed within the normal limitation period, and penalties were set aside. The judgment emphasized adherence to the Supreme Court's decision and the limitations on benefit extension under the notification.