2006 (3) TMI 736 - AT - Central Excise

Summary

Issues:
Classification of plastic sheetings under Chapter Heading 3926.90, demand notice for duty under Chapter Heading 3920.12, suppression of fact, extended period of limitation, approval of classification list, penalty imposition.

Analysis:

1. The appellants initially classified plastic sheetings under Chapter Heading 3920.12 but later sought classification under Chapter Heading 3926.90 based on a Supreme Court decision. However, a demand notice was issued for duty under Chapter Heading 3920.12, alleging suppression of fact and invoking an extended period of limitation. The Additional Commissioner confirmed the duty and imposed a penalty, which was upheld by the Commissioner (Appeals).

2. The appellants argued that their product falls under Chapter Heading 3926.90, citing the Supreme Court's decision in a similar case. They emphasized the distinction between sheets and sheeting, as interpreted by the Supreme Court. They also referred to a Tribunal decision supporting the application of principles from the old tariff to the new tariff.

3. Reference was made to Chapter Note 10 under Chapter 3 to support the argument that Heading Nos. 39.20 and 39.21 apply to sheets only, not to sheetings. The appellants contended that their actions did not constitute suppression as they had informed the department about their intended classification under Chapter Heading 3920.

4. The appellants highlighted that their classification list under Chapter Heading 3926.90 was approved by the department, making it final. They argued that a subsequent challenge to the approved classification was not valid, citing a Supreme Court decision and a Tribunal ruling on classification changes.

5. The Respondent argued that the Supreme Court's decision in a specific case related to the old tariff and did not apply directly to the new Central Excise Tariff. They contended that the term sheets and sheeting were treated differently in the old tariff but not in the new tariff, justifying the classification under Chapter Heading 3920.

6. Regarding limitation, it was argued that the appellants consistently declared their intent to pay duty at a higher rate under protest until the classification list was approved. However, they paid duty at a lower rate, misleading the department. The Respondent emphasized discrepancies in the appellants' classification claims.

7. The Tribunal held that the appellants' product was rightly classifiable under sub-heading 3920, not under sub-heading 3926.90. They found no merit in the appellants' arguments regarding suppression, classification approval, or limitation issues, upholding the lower authorities' decision in its entirety.

This detailed analysis covers the classification dispute, suppression allegations, extended limitation period, approval of classification list, and penalty imposition, providing a comprehensive overview of the legal judgment.