1983 (8) TMI 268 - AT - Central Excise

Summary

Issues:
1. Whether the demand of differential duty is within limitation.
2. Classification of Cobble Bundles under Central Excise Tariff.

Analysis:
1. The case involved a dispute regarding the classification of `cobble bundles' for the purpose of Central Excise duty. The appellants had been paying duty on the goods as `Steel Melting scrap' under Tariff Item 26 of the Central Excise Tariff for almost two decades. However, in 1976, the Excise authorities contended that the goods should be classified as re-rollable scrap falling under Tariff Item 26AA. A demand for differential duty amounting to Rs. 17,724.53 was raised for the period between 1-3-1973 to 31-8-1975. The Superintendent of Central Excise issued a Show Cause Notice, which was confirmed by the Asstt. Collector of Central Excise. The appeal was made to challenge this decision.

2. During the hearing, the appellants argued that they had classified the goods correctly under Tariff Item 26 and had disclosed all necessary facts to the Excise authorities, who had accepted their classification lists. The appellants contended that there was no intention to evade duty, and therefore, Rule 10 of the Central Excise Rules should apply, imposing a one-year limitation for making demands. The appellants also disputed the classification of the goods under Tariff Item 26AA as claimed by the Department. The Respondent, however, defended the orders passed by the lower authorities.

3. The Tribunal carefully considered the facts of the case and noted that the appellants had consistently classified the goods under Tariff Item 26, which had been accepted by the Excise Department for a significant period. Referring to relevant legal precedents, the Tribunal determined that Rule 10 was applicable, imposing a one-year limitation for making demands in such cases. As the show cause notice issued by the Superintendent of Central Excise was beyond the one-year limitation period, it was deemed barred by limitation. Consequently, the demand for differential duty was set aside based on this ground.

4. Given the finding on the limitation issue, the Tribunal did not delve into the classification of the goods under Tariff Item 26 or 26AA. It was deemed unnecessary to address the precedents cited during the arguments. Ultimately, the appeal was allowed on the grounds of limitation, and the orders of the lower authorities were set aside.