1985 (6) TMI 179 - AT - Central Excise

Summary

Issues Involved:
1. Correct classification of the product 'FRIT (enamel)'.
2. Legality of enforcing payment of differential duty for the period beyond six months from the date of the order.

Detailed Analysis:

Issue 1: Correct classification of the product 'FRIT (enamel)'
The appellants classified 'FRIT' under Item No. 68 CET, which was initially approved by the Assistant Collector. However, the Collector reclassified it under Item No. 23-A(4) CET, considering the technical authorities and amendments made to the Tariff Item No. 23-A CET by the Budget of 1979. The appellants argued that the classification should be based on trade and commercial parlance rather than technical parlance, citing various judicial pronouncements supporting this approach. They contended that 'FRIT' was not known as glassware in trade parlance and provided affidavits from dealers in glassware to support this claim. The Tribunal, however, noted that the product was described in the appellant's literature as "glass enamel" and used for glass lining, with raw materials similar to those used for ordinary glass. The Tribunal referred to Indian Standards Publications and CCCN, which recognized 'FRIT' as a form of glass. The Tribunal concluded that 'FRIT' fell under the description "other glass" in Item 23-A(4) CET and not under Item 68 CET, emphasizing that the classification should consider the product's specialized nature and limited market.

Issue 2: Legality of enforcing payment of differential duty for the period beyond six months from the date of the order
The appellants argued that even if 'FRIT' was correctly classified under Item 23-A(4) CET, the recovery of differential duty should be limited to six months preceding the date of the order, as per Section 11-A of the Act. They contended that no show cause notice was issued for the recovery of differential duty for the past period, making the Collector's order illegal. The Tribunal acknowledged that the show cause notice did not explicitly mention the recovery of short-levied amounts but noted that the Collector's order demanding differential duty was justified once the reclassification was determined. However, the Tribunal held that recoveries should be limited to six months preceding the date of the order, in accordance with the provisions of Rule 11 or Section 11A. The Central Excise authorities were directed to re-calculate the short-levy amount and communicate it to the appellants within three months.

Conclusion:
The Tribunal upheld the reclassification of 'FRIT' under Item 23-A(4) CET but limited the recovery of differential duty to six months preceding the date of the order. The appeal was otherwise rejected.