2008 (12) TMI 487 - AT - Central Excise

Summary

The Appellate Tribunal CESTAT, Chennai, under the jurisdiction of Shri P. Karthikeyan, heard an appeal challenging a penalty of Rs. 3 lakhs imposed on M/s. Metco Roof Private Limited under Rule 25 of the Central Excise Rules materially from 1-3-2004 to 28-2-2005. The dispute arose when the Commissioner found that the appellants misclassified roofing sheets of steel and purlins to evade full duty payment. The Commissioner, however, determined that the misclassification was not intentional and dropped the proposal to demand the duty under a larger period, as well as the proposal to impose a penalty under Section 11AC of the Act. The appellants had classified the goods based on their understanding and paid duty accordingly during the material period. The Tribunal noted that the classification of the goods was in dispute, with different views held by various benches. The dispute was resolved by a Larger Bench decision in the case of Mahindra & Mahindra Ltd. v. CCE. The Tribunal emphasized that classification and assessment of excisable goods are the responsibility of the department, and an assessee cannot be penalized for seeking a particular classification. Rule 25 of the Central Excise Rules provides for confiscation and penalty in specific cases of contravention, none of which applied to the appellants. Consequently, the Tribunal set aside the imposed penalty and allowed the appeal. The judgement was dictated and pronounced in open court.