2007 (10) TMI 469 - AT - Central Excise

Summary

Issues:
Challenge to duty demand on paper bags classification under Chapter Heading 48.19 of Central Excise Tariff Act, 1985 for 1996-97 to 1999-2000; Grounds of limitation; Imposition of penalty.

Analysis:
The appellants contested the duty demand upheld by the lower appellate authority, amounting to Rs. 2,81,540, related to the classification of paper bags under Chapter Heading 48.19 of the Central Excise Tariff Act, 1985 for the period 1996-97 to 1999-2000. The issue of limitation was raised, along with a penalty of Rs. 75,000, which was reduced by the Commissioner (Appeals) from an amount equal to the duty.

The absence of representation for the appellant despite notice was noted. After hearing the learned DR and examining the records, it was determined that the extended period of limitation was applicable to the Department. This conclusion was based on the fact that the goods initially described as paper pouches were actually classified under Chapter Heading 48.19, covering paper bags, not paper pouches as claimed. Since the appellants did not challenge this classification in their appeal, it was deemed that they accepted the goods as paper bags, indicating a deliberate misdeclaration. Consequently, the extended period of limitation was deemed valid, and the duty demand was upheld. The penalty reduction by the Commissioner (Appeals) was also upheld, with no grounds for further reduction, leading to the affirmation of the penalty.

In conclusion, the impugned order was upheld, and the appeal was rejected. The judgment was dictated in the open court, finalizing the decision in favor of sustaining the duty demand and penalty imposition as per the findings and legal reasoning provided in the analysis.