2006 (5) TMI 265 - AT - Central Excise

Summary

Issues Involved:
1. Classification of the product under the correct chapter heading.
2. Eligibility for concessional rate of duty.
3. Allegation of mis-declaration.
4. Time-barred nature of the show cause notice.

Detailed Analysis:

1. Classification of the Product:
The primary issue revolves around the classification of the appellant's product, 'Liquefied Petroleum Gas - also known as PPFS.' The appellant classified it under chapter heading No. 2711.19, claiming it as 'Other' petroleum gases, and availed a concessional duty rate of 8%. The revenue authorities, however, reclassified it under chapter heading No. 2711.12 as 'Liquefied Propylene Gas,' based on the predominance of propylene in the mixture, thus denying the concessional rate. The Tribunal examined the tariff entries and noted that Entry 2711.12 is for specific liquefied petroleum gases, including propylene, while Entry 2711.19 covers 'Other' gases, which would include mixtures.

2. Eligibility for Concessional Rate of Duty:
The appellant argued that the product was a mixture of gases and not solely propylene, thus qualifying for the concessional duty under Notification No. 3/2001. The Tribunal referred to a similar case, Cochin Refineries Ltd., where a mixture with a predominant component was classified under 2711.19, supporting the appellant's claim. The Tribunal concluded that the appellant's product, being a mixture, should be classified under chapter heading 2711.19, making it eligible for the concessional rate of duty.

3. Allegation of Mis-Declaration:
The revenue authorities accused the appellant of mis-declaring the product to wrongfully avail the concessional duty. The Tribunal, however, found that the appellant had filed a classification declaration, which was not disputed initially. The Tribunal emphasized that the product was commercially dealt with as a mixture and not as propylene, aligning with the appellant's declaration.

4. Time-Barred Nature of the Show Cause Notice:
The appellant contended that the show cause notice was time-barred since they had filed the classification declaration with the authorities. The Tribunal did not delve into this aspect, as the appeal was resolved on the merits of the classification and eligibility for concessional duty.

Conclusion:
The Tribunal, following the precedent set in Cochin Refineries Ltd., held that the appellant's product should be classified under chapter heading 2711.19, making it eligible for the concessional rate of duty. The impugned order was set aside, and the appeal was allowed on merits, without addressing the limitation issue. The operative part of the judgment was pronounced in the open court.