2008 (2) TMI 798 - AT - Central Excise

Summary

Issues involved: Classification of products under Chapter 38 vs. Chapter 25, imposition of penalties, confiscation of goods and machinery, extended period of limitation.

The impugned order confirmed duty on various products by classifying them under Chapter 38 instead of Chapter 25 as claimed by the appellant. The Tribunal remanded the matter earlier, holding the extended period of limitation not available to the Revenue. In the de novo proceedings, penalties were imposed, and goods and machinery were confiscated, with an option for redemption. Personal penalties were also imposed on the appellants.

The appellant did not contest the classification adopted by the Revenue and the duty confirmation but argued against the imposition of penalties and confiscation due to the demand being barred by limitation. The appellant's submissions focused on the lack of justification for penalties and confiscation in such circumstances.

The appellant had been filing declarations under Rule 174 of the Central Excise Rules, claiming classification under Chapter Heading 25.05 and exemption under Notification No. 70/95-C.E. The dispute centered on a bona fide classification dispute, leading to the demand beyond the extended period being held as time-barred. The Tribunal cited a Supreme Court decision to support the view that if the proviso to Section 11A cannot be invoked, penalties cannot be imposed under Rule 173Q. Consequently, the Tribunal found no justification for confiscation or penalties, setting them aside while confirming the duty demand uncontested by the appellants.