2009 (12) TMI 771 - AT - Central Excise

Issues Involved:
1. Classification and excisability of goods manufactured by M/s. Harmony and M/s. Maya.
2. Demand of duty and limitation period.
3. Bona fide belief and suppression of facts.
4. Penalty and interest under the Central Excise Act, 1944.
5. Confiscation and redemption fines.

Issue-wise Detailed Analysis:

1. Classification and Excisability of Goods:
The Tribunal remanded the matter to re-determine the classification of furniture supplied to hotels, cafeterias, and offices, leaving the question of the manufacturer's liability for duty open. It was held that FRP sections and FRP/POP statues are not classifiable under 3925 and 9618, and are non-excisable. Furniture and props supplied to studio sets from Harmony and Parade were excluded from Chapter 9404.00 and certain items were not classifiable under 9403.00. The adjudicating authority upheld the demand of duty on furniture manufactured on a job work basis for various divisions.

2. Demand of Duty and Limitation Period:
The adjudicating authority dropped the demand of Rs. 1,78,031/- on the grounds of limitation, finding that the assessee was under the bona fide belief that their goods were non-excisable. The Tribunal upheld this decision, noting that the majority of the goods were treated as non-excisable and the assessee had consistently contested the excisability of their products since 1993-94.

3. Bona Fide Belief and Suppression of Facts:
The Tribunal found that the assessee had a bona fide belief regarding the non-excisability of their goods, supported by previous Tribunal decisions and the longstanding practice of not paying duty on set properties, artistic furniture, and in situ furniture. The adjudicating authority cited various judicial precedents to support the conclusion that the extended period of limitation was not applicable due to the bona fide belief held by the assessee.

4. Penalty and Interest under the Central Excise Act, 1944:
The adjudicating authority dropped the proposals for personal penalties under Rule 209A, and the Tribunal set aside the penalties, confiscation, and redemption fines imposed, ordering that they may be re-determined if found liable in the remand proceedings. The Tribunal agreed with the adjudicating authority that no facts or circumstances indicated deliberate avoidance of duty by the assessee.

5. Confiscation and Redemption Fines:
The Tribunal set aside the confiscation and redemption fines imposed by the adjudicating authority, ordering that they may be re-determined if found liable in the remand proceedings. The adjudicating authority's findings on the non-excisability of certain goods and the bona fide belief of the assessee were upheld.

Conclusion:
The appeal filed by the Revenue was rejected, and the cross-objection filed by the respondent in support of the impugned order was disposed of. The Tribunal upheld the adjudicating authority's findings on the classification and non-excisability of certain goods, the bona fide belief of the assessee, and the dropping of the demand on the grounds of limitation. The penalties, confiscation, and redemption fines were set aside, with the possibility of re-determination in the remand proceedings.

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