2006 (8) TMI 362 - AT - Central Excise

Summary

Issues: Classification of product under Customs Tariff Act, 1975; Limitation for raising demand.

In this judgment by the Appellate Tribunal CESTAT, MUMBAI, the issue revolved around the classification of a product manufactured by the respondents, which consisted of two layers - release paper and BOPP film made from plastic material. The lower authorities classified the product under chapter heading 48.14 as paper-reinforced plastic sheets where paper predominates. However, the Revenue contended that the product should be classified as "Gummed or adhesive paper in rolls" based on commercial invoices where the assessees claimed it as "Gummed paper Rolls (B)" with "B" representing BOPP film. The Tribunal noted that the respondents were aware of misdeclaring the product as gummed paper rolls to clear BOPP film, which should be classified under heading 39.19 of CETA as film used in the nature of packing material.

Regarding the classification issue, the Tribunal found that the Revenue had a strong case on the merits of classification, and the appeal in favor of the Revenue was required. However, the Commissioner (Appeals) had also decided the appeal based on the limitation for raising the demand. The Tribunal observed that no ground on limitation was taken in the present appeal before them. Citing the case of CCE, Madras v. T.K.K. Pharma Limited, the Tribunal highlighted that since the classifications list had been in place for a long time and declarations were filed accordingly without objections from the department, the bar of limitation would be in favor of the assessee. Therefore, the Tribunal ruled that the classification issue favored the Revenue on merits, but the bar of limitation favored the assessee.

In conclusion, the appeal was disposed of by holding that the classification issue was in favor of the Revenue on merits, while the bar of limitation was in favor of the assessee. The judgment emphasized the importance of correctly classifying products and highlighted the significance of timelines in raising demands under the Customs Tariff Act, 1975.