2009 (12) TMI 805 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case include classification of goods under Chapter Sub-heading No. 3925.10, value of clearances, deliberate attempt to evade duty through separate invoices, time limitation for invoking proviso to Section 11A of Central Excise Act, 1944, and applicability of statutory provisions u/s 11 for penalty and interest.

Classification of goods under Chapter Sub-heading No. 3925.10:
The case involved the classification of FRP/PP Storage tanks, FRP/PP lining pipes, and FRP roofing sheets under Chapter Sub-heading No. 3925.10. The adjudicating authority held that the products were classifiable under this sub-heading as they were intended to store liquids or chemicals and were made of plastics. The Commissioner (Appeals) later held that the goods were classifiable under Chapter Sub-heading No. 3926.90 and eligible for relief. The issue of classification was further discussed in light of relevant case laws and the decision of the Hon'ble Supreme Court in the case of CCE v. KWH Heliplastics.

Value of clearances and deliberate attempt to evade duty:
It was alleged that separate invoices issued in the name of different entities were a deliberate attempt to bifurcate the value of clearances in order to evade payment of duty. The adjudicating authority found that the clubbing of clearances of Santom Enterprises and Santom Industrial Liners was in order due to shared premises, workforce, and machinery. The Commissioner (Appeals) set aside the initial order and the matter was sent back for re-consideration. The issue of evasion through separate invoices was a key point of contention throughout the proceedings.

Time limitation under proviso to Section 11A:
The question of time limitation for invoking the proviso to Section 11A of the Central Excise Act, 1944 was raised. The show cause notice was issued to the appellant on 11-1-1999 for the period between 1993-1995 and 1996-1998. The Tribunal considered the applicability of the extended period based on the law as it stood during the relevant period and cited relevant case laws to support the appellant's bona fide belief regarding classification under Chapter Heading No. 3926.90.

Applicability of statutory provisions u/s 11 for penalty and interest:
The Tribunal examined the applicability of Section 11 for penalty and interest in cases where the assessee acted under a bona fide belief. Citing judgments of the Hon'ble Supreme Court, the Tribunal held that when an assessee entertains a bona fide belief based on settled law at the relevant period, the invocation of the extended period under Section 11A is not justified. The Tribunal concluded that the show cause notice dated 11-1-1999 was time-barred and rejected the appeal filed by the revenue solely on the point of time limitation.