2006 (3) TMI 485 - AT - Central Excise

Summary

Issues:
Classification of Polyester Texturised Yarn (PTY) under different tariff sub-headings and applicability of small scale exemption under Notification No. 1/93 for a specific period.

Analysis:
The appeal before the Appellate Tribunal CESTAT, Mumbai pertained to the classification of Polyester Texturised Yarn (PTY) under Tariff sub-heading 5403.00 to 5402.32 due to changes made by the Finance Act of 1995. The department contended that the small scale exemption under Notification No. 1/93 was not extended to the new sub-heading during a certain period, resulting in short-levied duty by the respondents who had availed the exemption for that period.

The lower appellate authority decided the case based solely on the ground of limitation, as the demand notice was issued after the prescribed 6-month period. It was noted that no allegation was made regarding the application of the extended period. The Tribunal observed that the respondents had timely filed the classification list and RT-12 returns, and the department was aware of the budget changes. Consequently, the Tribunal found no justification for invoking the extended period of limitation in this case, leading to the decision not to interfere with the lower authority's order.

In conclusion, the Appellate Tribunal CESTAT, Mumbai rejected the department's appeal, emphasizing the lack of merit in invoking the extended period of limitation and affirming the lower authority's decision based on the timely compliance of the respondents and the department's awareness of the relevant changes.