2008 (11) TMI 510 - AT - Central Excise

Summary

Issues:
1. Classification of goods for duty liability.
2. Time-barred proceedings and pre-deposit requirement.
3. Allegations of evasion through misclassification.

Classification of goods for duty liability:
The appellant, a manufacturer of TV components, challenged the order of adjudication regarding the classification of goods for duty liability. The appellant claimed that the goods cleared fell under a specific classification, while the Revenue contended that a different classification with a higher duty rate should apply. The appellant sent parts of a TV as finished goods to a job worker, who incorporated them into finished goods bearing the appellant's brand name. The appellant then purchased these finished goods from the job workers for sale. The appellant argued that the goods cleared did not fall under Rule 2(a) of the Central Excise Tariff Act, citing judgments like Commissioner of Customs v. Sony India Ltd. and Tata Motors Ltd. v. CCE, Jamshedpur. The Tribunal found that the modus operandi challenged by the Revenue required detailed examination, but considering the appellant's contentions and the significant revenue involved, pre-deposit was waived during the appeal.

Time-barred proceedings and pre-deposit requirement:
The appellant contended that the proceedings were time-barred as they were initiated based on an opinion from Central Excise Audit in 2003, with the show cause notice issued in 2008. The appellant argued that since the proceedings were time-barred, pre-deposit of duty should not be insisted upon during the appeal. On the other hand, the Revenue claimed that the appellant's modus operandi resulted in evasion through misclassification, necessitating the pre-deposit of the demanded amount. The Tribunal acknowledged the time-barred nature of the proceedings but focused on the evasion allegations, granting liberty to both parties to apply for early hearing due to the substantial revenue involved, and waived the pre-deposit during the appeal.

Allegations of evasion through misclassification:
The Revenue alleged that the appellant's modus operandi of getting the final TV product assembled by a job worker resulted in evasion through misclassification. The Revenue argued that the appellant misclassified the goods, leading to the evasion of duty. The Tribunal noted the Revenue's contentions but also considered the appellant's arguments and the supporting judgments. While acknowledging the need for a detailed examination of the modus operandi, the Tribunal granted liberty for early hearing applications due to the significant revenue implications and waived the pre-deposit requirement during the appeal process.