2006 (7) TMI 413 - AT - Central Excise

Iron and Steel Articles - Demand duty - show cause notice issed - time-barred - HELD THAT - Following the ratio of the Larger Bench decision in Mahindra Mahindra Ltd. v. CCE 2005 (11) TMI 103 - CESTAT, NEW DELHI , we hold that the items in question are excisable goods classifiable under tariff item 68 of the Schedule to the erstwhile Central Excise Tariff upto 28-2-1986 and under Chapter Heading 73.08 of the Schedule to the CETA, 1985 for the subsequent period. However, we see force in the submission of the respondents that the demand is barred by limitation. Each show cause notice has been issued beyond the normal period of limitation of six months as seen herein below. Thus, we hold that the demands raised in the show cause notices adjudicating by the Commissioner in the present impugned order are time-barred and, therefore, fail on this score. In the result, we hold that while the items in dispute are excisable goods, the demands are barred by limitation - Appeal is disposed of as above.

Summary

Issues Involved: Excisability and classification of structurals, Demand for recovery of duty, Penal action proposed in show cause notices, Limitation period for demand.

Excisability and Classification of Structurals: The appeal filed by the Revenue concerns the excisability and classification of structurals used for construction. The Revenue argues that the goods are excisable and fall under specific tariff items, making them liable for duty. The Commissioner, however, accepted the assessee's argument that the goods are not excisable as they are not marketable for excise duty. The Tribunal refers to previous decisions, notably Mahindra & Mahindra Ltd., TISCO Ltd., and The Oriental Construction Co., which established that fabrication of iron and steel structures constitutes manufacture and falls under specific tariff classifications. The Tribunal rules that the items in question are excisable goods classifiable under relevant tariff items. However, it acknowledges the respondents' argument that the demand is time-barred due to limitations on issuing show cause notices beyond the prescribed period.

Limitation Period for Demand: The Tribunal considers the limitation period for the demands raised in the show cause notices. The assessees argue that they were not guilty of suppression to evade duty payment, citing their belief based on previous tribunal decisions and conflicting judicial views. The Tribunal finds merit in the assessees' contention, noting that the issue of dutiability of structurals was not definitively settled until the Larger Bench decision in Mahindra & Mahindra Ltd. The Tribunal also mentions the case of Punjab Chemi-Plants Ltd., where non-levy of duty was not deemed willful due to the evolving legal landscape. The Tribunal concludes that the demands raised in the show cause notices are time-barred and, therefore, fail on this basis.

Conclusion: The Tribunal rules that the items in dispute are excisable goods but that the demands for recovery of duty are barred by limitation. Consequently, the appeal is disposed of based on these findings.